Vaibhav Global Ltd. · NSE:VAIBHAVGBL
Vaibhav Global — Investor Presentation (June 2014)
38 slides from Vaibhav Global's investor presentation, June 2014
Slide 1: Vaibhav Global Limited
Vaibhav Global Limited Global Retailer of Fashion and Lifestyle Accessories on Home TV and e-Commerce Platforms Investor and Analyst Meet June 2014
Slide 2: Safe Harbor
Safe Harbor Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ ma
Slide 3: Table of Contents
Table of Contents Key Snapshot 4 Business Overview 9 Operating & Financial Performance 21 Management Overview 31 Way Forward 35 3
Slide 4: Key Snapshot - Operational
Key Snapshot - Operational Products Sold Annually TV Homes Unique SKU’s On TV and Web Directly Accessed (FTE) Unique Customers Employees Global Locations B2C Success in Developed Markets 4
Slide 5: Key Snapshot - Financial
Key Snapshot - Financial Revenues PAT Free Cash Flow ROE ROCE Net Debt - Equity Last 4 years Revenue Growth Highly Profitable Electronic & Web model 5
Slide 6: VGL Overview
VGL Overview Vertically-integrated electronic retailer • End-to-end B2C business model in the electronic retail industry • Proprietary TV homeshopping and e-commerce platforms Liquidation Channel and The Jewellery Channel are strong brands • 95 million (FTE) households on TV shopping in the US, UK a
Slide 7: Key Performance Indicators
Key Performance Indicators P&L (Rs. crore) Balance Sheet/Cash Flows (Rs. crore) Ratios Revenues Net Worth 1.0 Debt:Equity 1,298 265 205 233 0.8 0.7 893 186 159 0.6 526 647 338 0.2 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 EBITDA (Before Exch.) 176 Net Debt ROCE (%) 1
Slide 8: Table of Contents
Table of Contents Key Snapshot 4 Business Overview 9 Operating & Financial Performance 21 Management Overview 32 Way Forward 36 8
Slide 9: Product Profile
Product Profile Watches, handbags, scarves, phone protective shells etc. Bracelets, bangles, earrings, studded jewelry etc. Office and home décor, etc. Continuously expanding product range – portfolio of 65,000 designs augmented with launch of lifestyle accessories 9
Slide 10: US Market Access on Liquidation Channel
US Market Access on Liquidation Channel Channel #274 Channel #399 & 1399 Channel #159 Channel #75 & 226 * * * https://www.liquidationchannel.com * * * Different channel # across various locations Access to 70 million (FTE) of the 116 million households in the US 10
Slide 11: UK Market Access on The Jewellery Channel
UK Market Access on The Jewellery Channel Channel #49 Channel #650 Channel #815 Channel #757 www.thejewellerychannel.tv Access to 25 out of the total 25 million households 11
Slide 12: E-Commerce
E-Commerce • Digital presence through liquidationchannel.com and thejewellerychannel.tv • Retail formats: – Catalog – Rising Auctions • Loyal visitor base driving e-commerce traffic: – Liquidationchannel.com has Alexa rank of 4,097 in US – Thejewellerychannel.tv has Alexa rank of 16,914 in UK • Tech
Slide 13: Market Opportunity
Market Opportunity US market size (US$ Bn) UK market size (US$ Bn) Fashion Fashion Accessories Accessories 17 6 Fine and Fine and Fashion Fashion Jewelry 67 Jewelry 8 VGL has delivered market share gains by constantly introducing collections/designs mapped to fashion trends across an expanding distr
Slide 14: Market Opportunity for VGL
Market Opportunity for VGL Vaibhav Global Leading US headquartered homeshopping companies (US & UK) VGL Company 1 Company 2 Company 3 Revenue $215 mn $640 mn $2.3 bn $8.6 bn Gross Profit Margin 61% 36% 35% 37% EBITDA margin 12% 3% 11% 21% Households reached 95 mn 87 mn 96 mn 195 mn Revenue per house
Slide 15: Sourcing Markets
Sourcing Markets Manufacturing facility in Jaipur, India Production capacity – 4 million pieces p.a. ISO 9001:2008 manufacturing facilities Over 2,200 people in India across corporate, manufacturing, design, sales & marketing, customer service, logistics etc Sourcing operations from fashion centric
Slide 16: Consumption Markets
Consumption Markets Access to over 95 million (FTE) households on TV homeshopping in the US, UK and Canada • Affiliate agreements with major cable, satellite providers • Improved product presentation by investing into studio facilities The Jewellery Channel Liquidation Channel UK USA • The Jewellery
Slide 17: Gaining Customer Traction
Gaining Customer Traction • Expanding household distribution and improved brand awareness • Appeal to broader customer base through exquisite designs, exceptional quality, outstanding value and excellent service • Enhancing customer experience and trend merchandising drive retention rate and custome
Slide 18: Fast Fashion Supply Chain
Fast Fashion Supply Chain Assessing value perception – design / fashion trend / price in target Competitive markets Pricing Mapping latest fashions Vendor Core evaluation competency process of vendor Rapid turnaround Sourcing from appropriate micro-markets in China/Asia Delivery/ Low Focus on best q
Slide 19: Aligned with Demand Patterns
Aligned with Demand Patterns Process Buyer discussions Evaluation/ feedback of last year’s hits/misses Product Valentine Day & Mothers’ Summer Product development strategies – by Spring Product Line Day Line category Process begins – September Process begins – December Process begins – Decembe
Slide 20: Table of Contents
Table of Contents Key Snapshot 4 Business Overview 9 Operating & Financial Performance 21 Management Overview 31 Way Forward 35 20
Slide 21: Financials Performance Trends (Revenues)
Financials Performance Trends (Revenues) Revenues (Rs. crore) 1,298 40% CAGR 893 647 526 338 FY10 FY11 FY12 FY13 FY14 Jewelry & Lifestyle Products TV Sales Web Sales B2B Sales 911 225 36% CAGR 162 687 81% CAGR 117 32% CAGR 483 395 73 85 91 89 263 46 54 21 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13
Slide 22: Retail Performance Trends
Retail Performance Trends TV Sales Sales Volumes ('000s) Average selling price US$ 74% CAGR 6,420 62 5,239 • Robust volume growth driven by strong 41 3,268 30 customer engagement 2,039 23 24 698 • ASP has trended inline with portfolio transition from fine jewelry to fashion FY10 FY11 FY12 FY13 FY14
Slide 23: Financials Performance Trends (Margins)
Financials Performance Trends (Margins) Rs. crore Gross Profit Gross margin 900 70% 59% 60% 61% 800 55% 60% 700 50% 600 • Gross margins remain robust supported 500 36% 40% by a sourcing matrix that provides 400 30% flexibility to purchase from cost efficient 300 markets 20% 200 100 10% 122 289 384 5
Slide 24: Financials Performance Trends (Cost Analysis)
Financials Performance Trends (Cost Analysis) Rs. crore Direct Costs % of Sales 600 64% 70% 500 60% 45% 50% 400 41% 40% 39% • Efficient global sourcing has allowed 40% industry-leading gross margins as 300 30% customers recognize deep value 200 delivered at reasonable prices 20% 100 10% 216 237 263
Slide 25: Financials Performance Trends (Profits)
Financials Performance Trends (Profits) Rs. crore PAT PAT margin 200 12% 12% 15% 8% 8% 10% 150 5% • PAT expansion is in line with 100 0% improvement in core business 50 profitability -5% 42 79 78 153 0 -58 -10% -50 -14% -15% -100 -20% FY10 FY11 FY12 FY13 FY14 Rs. per share EPS (Before Exceptional It
Slide 26: Financials Performance Trends (Balance Sheet)
Financials Performance Trends (Balance Sheet) Rs. crore Shareholders’ Equity Rs. crore Fixed Assets 265 207 205 203 233 205 186 159* 58* 66 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 * During FY13, Shareholders’ Equity was adjusted lower by Rs. 163.7 crore due * During FY13 fixed assets were
Slide 27: Financials Performance Trends (Cash Flow)
Financials Performance Trends (Cash Flow) Rs. crore Free Cash Flow* Rs. crore Operating Cash flow 178 160 77 63 54 52 48 44 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 -27 -36 *Includes Foreign Currency Transaction Reserve 27
Slide 28: Financials Performance Trends (Key Ratios)
Financials Performance Trends (Key Ratios) Fixed Assets / Turnover Debt:Equity 1.0 19.6 0.8 15.4 0.7 0.6 0.2 2.6 3.2 1.6 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 * During FY13 fixed assets were adjusted lower by Rs. 151.1 cr due to goodwill written off . Adjusting the goodwill write-off in
Slide 29: Financials Performance Trends (Key Ratios)
Financials Performance Trends (Key Ratios) ROE ROCE 68% 65% 60% 37% 36% 34% 23% 15% FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 -9% -41% 29
Slide 30: Table of Contents
Table of Contents Key Snapshot 4 Business Overview 9 Operating & Financial Performance 21 Management Overview 31 Way Forward 35 30
Slide 31: Management Team
Management Team Sunil Agrawal Chairman and Managing Director Established Vaibhav in 1980 as a first generation entrepreneur and has led the company’s transition into a leading brand for fashion jewelry and lifestyle accessories Travels extensively across the world, overseeing operations, sourcin
Slide 32: Management Team
Management Team Hemant Sultania Gaurav Vishal Soni Group Chief Financial Officer Chief Operating Officer, VGL India 17 years of rich experience in strategic financial planning, budgeting, project evaluation, commercial and legal affairs, taxation, fund management, finalization of 17 years of ext
Slide 33: Recent Additions to the Board
Recent Additions to the Board Pulak Prasad Vikram Kaushik Director Director 40 years of experience with the companies like Unilever, Britannia, Colgate-Palmolive and Tata Sky Founder of private equity fund Nalanda Capital Pte Ltd Management consultant / advisor to groups like Voltas, Serves
Slide 34: Table of Contents
Table of Contents Key Snapshot 4 Business Overview 9 Operating & Financial Performance 21 Management Overview 31 Way Forward 35 34
Slide 35: Way Forward
Way Forward • Increase channel reach through affiliate agreements TV Retail • Connect with customers through improved story telling • Further investment in e-commerce platforms, enhance customer E-Commerce experience Retail • Mobile Apps for better engagement with the customers on the go • Increase
Slide 36: Way Forward
Way Forward • Investment in technology to support growth through new IT systems IT • ERP, Marketing Automation, MIS, Analytics, CRM Infrastructure • Drive value through outsourcing strategy • SMAC Principles as guidelines for coming years Organization • Customer Trust & Delight, Low Price – High Qua
Slide 37: Contact Information
Contact Information For more information on Vaibhav Global Limited, please contact: Hemant Sultania Vaibhav Global Ltd. Tel: +91-141-2770648 Email: Hemant@vglgroup.com Shiv Muttoo / Karl Kolah CDR India Tel: +91 22 6645 1207 / 1220 Email: shiv@cdr-india.com karl@cdr-india.com 37
Slide 38: Thank You
` Thank You 38