Kddl Limited · NSE:KDDL
Kddl — Q1 FY2020 Earnings Presentation
36 slides from Kddl's earnings presentation, Aug 14, 2019
Slide 1: KDDL Limited filing cover letter
KDDL Limited Kamla Centre, SCO 88-89, Sector 8-C, Chandigarh - 160 009, INDIA. Tel: +91 172 2548223/24, 2544378/79 Fax: +91 172 2548302, Website:www.kddl.com CIN-L33302HP1981PLC008123 Ref : KDDL/CS/2019-20/39 Date : 14th August, 2019 National Stock Exchange of India Limited BSE Limited, Exchange Pla
Slide 2: KDDL Limited & Ethos Limited Result Update Presentation Q1FY20
KDDL Limited & ETHOS Limited Result Update Presentation August 2019 Q1FY20
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which has been prepared b Kddl Ltd and Ethos Limited, a material subsidiary of KDDL Limited, (the “Company”), solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or s
Slide 4: Q1FY20 Performance Overview
Q1FY20 Performance Overview
Slide 5: Q1FY20 Performance
Q1FY20 Performance Standalone Performance Revenue (Rs. Cr) EBITDA (Rs. Cr) PAT (Rs. Cr) 48.0 44.3 8.2 8.3 3.8 2.9 Q1FY19 Q1FY20 Q1FY19 Q1FY20 Q1FY19 Q1FY20 Ethos Performance (Consolidated) Revenue (Rs. Cr) Normalized EBITDA (Rs. Cr) PAT (Rs. Cr) 100.8 102.1 12.5 1.5 6.8 0.0 Q1FY19 Q1FY20 Q1FY19 Q1FY
Slide 6: Standalone P&L
Standalone P&L Standalone Rs. Crs Q1FY20 Q1FY19 YoY% FY19 Revenue 48.0 44.3 9% 175.2 Cost of Goods Sold 12.5 10.8 44.6 Gross Profit 35.6 33.4 6% 130.6 Employee Expenses 14.1 12.8 49.1 Other Expenses 13.1 12.5 49.1 EBITDA 8.3 8.2 1% 32.5 Margin (%) 17.3% 18.6% 18.5% Other Income 0.9 0.6 3.9 Interest
Slide 7: Consolidated P&L
Consolidated P&L Consolidated Commentary Rs. Crs Q1FY20 Q1FY19 YoY% FY19 Revenue 152.7 146.2 4% 624.2 Cost of Goods Sold 84.9 84.9 360.9 Gross Profit 67.8 61.3 11% 263.3 Employee Expenses 25.8 20.0 86.4 Other Expenses 24.0 27.9 111.5 ▪ PAT was impacted by INDAS 116 accounting EBITDA 18.1 13.4 35% 65
Slide 8: Adjusted Consolidated Profit & Loss
Adjusted Consolidated Profit & Loss Adjusted for INDAS 116 Q1FY20 Particulars (Rs. Crores)* YoY% As Reported Q1FY20 Q1FY19 Revenue 152.7 152.7 146.2 4% Cost of Goods Sold 84.9 84.9 84.9 Gross Profit 67.8 67.8 61.3 11% Employee Expenses 25.8 25.8 20.0 Other Expenses 24.0 31.8 27.9 Normalized EBITDA 1
Slide 9: Ind AS 116: Impact on Financials
Ind AS 116: Impact on Financials • On 1 April 2019, the Group has adopted Ind AS 116 “leases”, using the modified retrospective approach. Accordingly, the comparatives have not been retrospectively adjusted • The adoption of Ind AS 116 has resulted in recognizing a Right-of-Use Assets of Rs. 88.6 Cr
Slide 10: Balance Sheet
Balance Sheet Consolidated Standalone Rs. Crs Mar-19 Mar-18 Mar-19 Mar-18 Equity 235.0 161.7 167.1 130.3 (a) Equity share capital 11.7 11.0 11.7 11.0 (b) Other equity 179.1 121.0 155.4 119.3 Non Controlling Interest 44.2 29.7 - - Non-current liabilities 73.9 53.2 41.0 39.2 (a) Financial Liabilities
Slide 11: Manufacturing Business Overview
Manufacturing Business Overview
Slide 12: Introduction - Watch Dials and Hands Business
Introduction - Watch Dials and Hands Business Watch Hands Value Watch Dials Proposition ▪ Commercial ▪ Deep Understanding ▪ Commercial operations operations began in of the Global Watch began in 1983 Industry ▪ Leading Global supplier 1996 of Watch Dial serving ▪ Only supplier in India ▪ Established
Slide 13: Acquired "Estima AG" in Switzerland
Acquired “Estima AG” in Switzerland About Estima AG Strategic Rationale ▪ Estima was established as a maker of watch ▪ Estima was a competitor of the Company in the hands in Switzerland in 1924 business of watch hands manufacturing ▪ It was a leading supplier to Swiss and other ▪ Has a well establis
Slide 14: Introduction - Precision Engineering Business
Introduction - Precision Engineering Business Value Proposition Eigen offers a full package of services, ranging from design and development to full scale production, providing customers with optimized supply chain solutions Capabilities We address various segments such as Electrical, Electronics, A
Slide 15: Stable Manufacturing Performance
Stable Manufacturing Performance* Revenue (Rs. Crs) EBITDA (Rs. Crs) 175 32 +11% +15% 146 27 127 125 22 21 FY16 FY17 FY18 FY19 FY16 FY17 FY18 FY19 14 *Excludes the Financial Performance of Estima AG, Switzerland
Slide 16: Ethos: Q1FY20 Snapshot
—_— i |] | WATCH BOUTIQUES Ethos: Q1FY20 Snapshot
Slide 17: Q1FY20 Performance
Q1FY20 Performance Q1FY20 vs Q1FY19 (Consolidated*) Billings (Rs. Cr) Revenue (Rs. Cr) 116.8 118.1 100.8 102.1 Q1FY19 Q1FY20 Q1FY19 Q1FY20 Normalized EBITDA (Rs. Cr) PBT (Rs. Cr) 12.5 2.3 6.8 0.1 Q1FY19 Q1FY20 Q1FY19 Q1FY20 *Consolidated Financials include Watch Retailing Business and Digital Market
Slide 18: Consolidated Profit & Loss
Consolidated Profit & Loss Particulars (Rs. Crores)* Q1FY20 Q1FY19 YoY % FY19 Revenue 102.1 100.8 1% 445.1 Cost of Goods Sold 71.6 73.3 315.9 Gross Profit 30.5 27.5 11% 129.2 Employee Expenses 8.7 6.9 33.4 Other Expenses 9.6 15.2 61.8 Reported EBITDA 12.1 5.4 125% 34.0 Margin (%) 11.9% 5.4% 7.6% Int
Slide 19: Adjusted Consolidated Profit & Loss
Adjusted Consolidated Profit & Loss Adjusted for INDAS 116 & other items Q1FY20 Particulars (Rs. Crores)* YoY% As Reported Q1FY20 Q1FY19 Revenue 102.1 102.1 100.8 1% Cost of Goods Sold 71.6 71.6 73.3 Gross Profit 30.5 30.5 27.5 11% Employee Expenses 8.7 8.7 6.9 Other Expenses 9.3 16.4 13.8 Normalize
Slide 20: Ind AS 116: Impact on Financials
Ind AS 116: Impact on Financials • On 1 April 2019, the Group has adopted Ind AS 116 “leases”, using the modified retrospective approach. Accordingly, the comparatives have not been retrospectively adjusted • The adoption of Ind AS 116 has resulted in recognizing a Right-of-Use Assets of Rs.79.8 Cr.
Slide 21: Consolidated Balance Sheet
Consolidated Balance Sheet Particulars (Rs. Crores)* Mar-19 Mar-18 Shareholder’s Fund 134 92 Share Capital 17 16 Other Equity 117 76 Non-current liabilities 16 13 Long Term borrowings 14 11 Long Term Provisions 2 1 Current liabilities 148 146 Short Term Borrowings 53 41 Trade Payables 67 77 Other Cu
Slide 22: Largest Pan India retailer of Luxury Watches
Largest Pan India retailer of Luxury Watches Additions Total Stores Ethos Flagship Store, 50 Roxana Fortune Building, Hyderabad 5250 Sq. Ft. Ethos Boutique, City Centre Mall, Guwahati 1089 Sq. Ft. Stores as of Mar-19 47 Ethos Summit, Phoenix Market City, Pune 2255 Sq. Ft. With 50 pan India stores, E
Slide 23: Fund Raise strengthens Balance Sheet
Fund Raise strengthens Balance Sheet Rs. 50cr Rs. 480cr 73.56% Shareholding of Ethos Limited raises Funds raised at a pre KDDL Ltd (directly Rs. 29 crores equity money valuation of and indirectly) in funds in FY19 & Rs. Rs. 480 crores Ethos Ltd on fully 21 Crores YTD FY20 diluted basis Equity Funds
Slide 24: New Initiatives
New Initiatives Repair and Service Pre-Owned Watches Pre-Owned Watches has the potential to Repair and services over 60 expand the volume and customer base of the World’s top Luxury watch Ethos has the expertise to check the authenticity Brands and to ensure that each time piece is in great conditio
Slide 25: Operational Snapshot
=~ LI WATCH BOUTIQUES Operational Snapshot
Slide 26: Ethos - Performance Trend
Ethos - Performance Trend Revenue (Rs. Cr) Front-end Rent & Manpower Cost as % of Revenue 99.1 100.8 102.1 13.5% 13.5% 11.3% 11.8% 69.1 71.1 9.4% Q1FY16 Q1FY17 Q1FY18 Q1FY19 Q1FY20 Q1FY16 Q1FY17 Q1FY18 Q1FY19 Q1FY20 EBITDA (Rs. Cr) EBITDA Margin 12.1 11.9% 5.4 5.3% 2.9% 2.0 0.2 0.2% -1.1 -1.6% Q1FY1
Slide 27: Ethos - Online Sales Trend
Ethos - Online Sales Trend Online Billings (Rs. Cr) Online Billing as % of Total Billing 39.5 32.9% 33.8% 34.6 31.2% 32.7 28.5% 27.7% 26.3 22.2 Q1FY16 Q1FY17 Q1FY18 Q1FY19 Q1FY20 Q1FY16 Q1FY17 Q1FY18 Q1FY19 Q1FY20 Visitors (‘000) 3,873 3,424 2,894 2,181 1,812 Q1FY16 Q1FY17 Q1FY18 Q1FY19 Q1FY20 Q1FY2
Slide 28: Ethos - Repeat Sales Trend
Ethos - Repeat Sales Trend Club ECHO Member Base Repeat Billings (Rs. Cr) 224,069 39.6 39.3 216,704 184,891 29.9 154,357 14.2 Mar’17 Mar’18 Mar’19 Jun’19 Q1FY17 Q1FY18 Q1FY19 Q1FY20 Q1FY20 Financials are with applicability of IND AS 116 27
Slide 29: Ethos is India's Largest Luxury Watch Retailer
Ethos is India’s Largest Luxury Watch Retailer 28
Slide 30: Pan-India Presence with Offline Store Network
Pan-India Presence with Offline Store Network India’s Largest retail chain of Luxury Watches with 50 stores Ludhiana Chandigarh Presence across Metros, Tier I, Tier II cities New Delhi Gurugram Noida Jaipur Guwahati Lucknow 1 Duty Paid Retail Outlet at Domestic Bhopal Terminals Ahmedabad Indore Nagp
Slide 31: Strong Business Strategy
Strong Business Strategy Exclusive New Store Digital Right Mix Brands Strategy ▪ Higher share of ▪ Targeting to open new ▪ Leverage on our Digital ▪ Targeting to have a Business from stores in Tier 2 cities platform to drive sales right mix of Brands at Exclusive Brands and customers all price point
Slide 32: Ethos is India's Preferred Destination for Luxury Watches
Ethos is India’s Preferred Destination for Luxury Watches… Knowledge One-stop shop Mind Share Ethos has well trained Ethos’ access to Swiss Watch Ethos to be synonymous with Knowledgeable staff to ensure Brands will make it a ‘1 Stop Luxury watches retailing in highest customer satisfaction Shop’ fo
Slide 33: With an Asset Light Model
With an Asset Light Model… Improve Return On Capital Employed Operating Leverage Playing Out Reduce Front-End Cost like Manpower and Rental expenses Maximize Reach Expand catchment area of offline store, leading to higher revenue Minimize Investment Focus on Online Presence & Rationalize Store Prese
Slide 34: and Continued Investments in Advertising
and Continued Investments in Advertising… Print Ads in leading newspapers… … with ETHOS co-branding 33
Slide 35: Offering the best Watch Brands under one roof
Offering the best Watch Brands under one roof The Brand Names mentioned are the property of their respective owners and are used here for identification purposes only 34
Slide 36: For further information, please contact
For further information, please contact: Company : Investor Relations Advisors : Ethos Ltd. CIN : U52300HP2007PLC030800 CIN : U74140MH2010PTC204285 Mr. C. Raja Sekhar Mr. Shogun Jain/ Mr. Shrenik Shah +91 7738377756 / +91 9664764465 rajasekhar@ethoswatches.com shogun.jain@sgapl.net / Shrenik.shah@sg