Tribhovandas Bhimji Zaveri Limited · NSE:TBZ
Tribhovandas Bhimji Zaveri — H1 FY2018 Earnings Presentation
29 slides from Tribhovandas Bhimji Zaveri's earnings presentation, December 2017
Slide 1: Investor Presentation Q2 & H1 FY18 Results
INVESTOR PRESENTATION Q2 & H1 FY18 RESULTS DECEMBER 2017
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 • Q2 & H1 FY18 Results Update • About Us • Operational Summary • Business Model
Slide 4: Key Highlights
KEY HIGHLIGHTS • H1 FY18 revenues were stable on YoY basis • Q2 FY18 revenues were impacted post 23rd August when a notification was issued under The PMLA Act that mandated the Gems & Jewellery sector to collect KYC details from customers for purchases above Rs. 50,000 and report such transactions.
Slide 5: H1 FY18 Results Update
H1 FY18 RESULTS UPDATE In Rs Mn REVENUES & GROSS MARGIN EBITDA & EBITDA MARGIN PBT & PBT MARGIN 16.3% 15.5% 5.4% 4.1% 1.3% 1.3% 7,718 7,745 414 317 101 103 H1 FY17 H1 FY18 H1 FY17 H1 FY18 H1 FY17 H1 FY18 Revenues Gross Margin EBITDA EBITDA Margin PBT PBT Margin PAT & PAT MARGIN OPERATING COSTS (%) 1
Slide 6: H1 FY18 Results Update: Revenue Analysis
H1 FY18 RESULTS UPDATE In Rs Mn REVENUE ANALYSIS 12.8% 31.4% 9.4% 27.9% 1,985 5,493 5,579 1,759 H1 FY17 H1 FY18 H1 FY17 H1 FY18 Gold Sales Gold GM Diamond Sales Diamond GM AVERAGE TICKET PRICE H1 FY18 Gold Diamond % of Sales – H1 FY18 72.0% 25.6% 1,36,780 1,33,416 93,926 88,247 % of Sales – H1 FY17
Slide 7: Q2 FY18 Results Update
Q2 FY18 RESULTS UPDATE In Rs Mn REVENUES & GROSS MARGIN EBITDA & EBITDA MARGIN PBT & PBT MARGIN 15.5% 16.4% 5.3% 1.8% 3.7% 0.4% 4,473 237 79 3,262 119 14 Q2 FY17 Q2 FY18 Q2 FY17 Q2 FY18 Q2 FY17 Q2 FY18 Revenues Gross Margin EBITDA EBITDA Margin PBT PBT Margin PAT & PAT MARGIN OPERATING COSTS (%) 1.8
Slide 8: Q2 FY18 Results Update: Revenue Analysis
Q2 FY18 RESULTS UPDATE In Rs Mn REVENUE ANALYSIS 33.5% 12.0% 11.1% 27.6% 3,127 2,470 982 767 Q2 FY17 Q2 FY18 Q2 FY17 Q2 FY18 Gold Sales Gold GM Diamond Sales Diamond GM AVERAGE TICKET PRICE Q2 FY18 Gold Diamond % of Sales – Q2 FY18 75.8% 23.5% 1,37,577 1,23,187 1,03,911 % of Sales – Q2 FY17 70.0% 22
Slide 9: Balance Sheet Update
BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 8.2% 7.7% 37.8% 35.8% 59.0% 64.4% 54.0% 56.5% 41.0% 35.6% Mar-17 Sep-17 Mar-17 Sep-17 Gold Diamond Others Own Gold Gold on Loan LEVERAGE (RS MN) * 1.4 1.1 1.1 1.1 1.2 6,405 5,170 5,471 4,492 4,553 5,031 4,610 4,739 5,091 4,730 Sep-16 Dec-16 Mar-17 Jun-17 Se
Slide 10: Key Result Takeaways
KEY RESULT TAKEAWAYS REVENUES: MARGINS: • Q2 FY18 revenues declined by 27% YoY – • Q2 FY18 gross margin increased to 16.4% compared to 15.5% in Q2 FY17. This was due to higher diamond gross margin and • Sales were impacted post 23rd August due to The PMLA higher share of diamond jewellery sales. Act
Slide 11: Profit & Loss Statement
PROFIT & LOSS STATEMENT Particulars (In Rs Mn) Q2 FY18 Q2 FY17 YoY % H1 FY18 H1 FY17 YoY % Net Revenues 3,262 4,473 -27.1% 7,745 7,718 0.3% COGS 2,727 3,779 -27.8% 6,544 6,458 1.3% Gross Profit 535 694 -22.9% 1,200 1,260 -4.7% Gross Margin (%) 16.4% 15.5% 88 bps 15.5% 16.3% -83 bps Excise Duty 0 18
Slide 12: Balance Sheet
BALANCE SHEET Particulars (In Rs Mn) September-17 June-17 Shareholders Funds 4,730 4,739 Loan Funds 6,041 5,511 Other Long Term Liabilities 71 57 Sources of Funds 10,842 10,307 Net Block 1,033 1,021 Other Long Term Assets 257 233 Inventory 11,145 10,293 Debtors 70 84 Cash and Bank Balance 570 420 Ot
Slide 13: Discussion Summary
DISCUSSION SUMMARY • Q2 & H1 FY18 Results Update • About Us • Operational Summary • Business Model
Slide 14: About Us: Why Is TBZ Different?
ABOUT US: WHY IS TBZ DIFFERENT ? Pedigree Strong Brand Value • 150+ years in jewellery business • Healthy sales productivity • First jeweller to offer buyback guarantee • High footfalls conversion - 80% in 1938 • High ticket size - Gold - Rs 88 k, • Professional organisation spearheaded Diamond - Rs
Slide 15: About Us: Key Milestones
ABOUT US: KEY MILESTONES STRONG LEGACY OF MORE THAN 150 YEARS BUILT ON TRUST Retail footprint Flagship store Introduced 100% Diamond facility crosses 84k sq ft 2nd Franchise opened in Zaveri pre-hallmarked expansion - ~6k to 1st Franchise across 20 cities store opened at Bazaar, Mumbai jewellery ~24
Slide 16: About Us: Shareholding Structure
ABOUT US: SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – SEPTEMBER 2017 Public, 23.8% Institutions, 2.1% Promoter, 74.1% 16
Slide 17: About Us: Retail Presence
ABOUT US: RETAIL PRESENCE Present across 27 cities PAN-INDIA PRESENCE WITH 37 STORES WITH A in 11 states RETAIL SPACE OF ~1,14,459 SQ. FT. SPREAD ACROSS 27 CITIES IN 11 STATES NUMBER OF STORES TILL DATE Large Format (> 2,000 sq. ft.) 29 Small Format (<= 2,000 sq. ft.) 8 Total Stores 37 Surat Rajkot
Slide 18: About Us: Retail Footprint Expansion
ABOUT US: RETAIL FOOTPRINT EXPANSION 1,14,459 1,02,930 98,200 91,058 88,093 37 82,368 32 30 27 28 25 FY13 FY14 FY15 FY16 FY17 Nov-17 No. of Retail Outlets Carpet Area (sq. ft.) 18
Slide 19: Discussion Summary
DISCUSSION SUMMARY • Q2 & H1 FY18 Results Update • About Us • Operational Summary • Business Model
Slide 20: Operational Summary
OPERATIONAL SUMMARY GOLD & DIAMOND VOLUMES * GOLD & DIAMOND SALES MIX (%) 52,010 48,662 43,808 77% 75% 76% 76% 39,958 40,762 75% 4,706 4,361 4,216 3,738 3,710 23% 21% 22% 22% 22% FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Gold Sales (kgs) Diamond Sales (cts) Gold Diamond GOLD & DIAMOND MARGIN
Slide 21: Operational Summary
OPERATIONAL SUMMARY SSSG - TOTAL (%) * SSSG - GOLD (%) * SSSG - DIAMOND (%) * 13.0 4.0 3.5 1.3 1.4 -0.2 -2.1 -5.4 -8.6 -9.9 -9.3 -15.4 -15.8 -16.5 -20.8 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 SSSG: Same store sales value growth AVERAGE TICKET SIZE (RS ‘000) 131 13
Slide 22: Discussion Summary
DISCUSSION SUMMARY • Q2 & H1 FY18 Results Update • About Us • Operational Summary • Business Model
Slide 23: 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 24: Business Model: Manufacturing (Diamond)
BUSINESS MODEL: MANUFACTURING Diamond PROCUREMENT • Raw Material - Cut & polished diamonds Sources: • DTC site holders • In-house diamond jewellery manufacturing leading to exclusive designs, lower costs, and higher margins • Manufacturing facility at Kandivali, Mumbai MANUFACTURING spread over ~24,
Slide 25: Business Model: Retail
BUSINESS MODEL: RETAIL EFFICIENT INVENTORY MANAGEMENT HUB & SPOKE MODEL - ROI OPTIMISATION SMALL STORES • <= 2,000 sq ft SMALL • Across the city STORE • Smaller range • Lower price points (up to Rs 500k) SMALL LARGE FORMAT SMALL LARGE STORES STORE STORE STORE • > 2,000 sq ft • Standalone high street
Slide 26: Business Model: Scalability
BUSINESS MODEL: SCALABILITY • TBZ has an expansion plan to increase its retail space from ~1,14,459 sq. ft. at present to around 1,50,000 sq. ft. over near term. • TBZ plans to carry out 75% of the expansion through the franchisee route and balance 25% through the addition of its own stores. • All t
Slide 27: 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
Slide 28: Awards & Recognition
AWARDS & RECOGNITION • “BEST RING DESIGN OVER Rs. 2,50,000” JJS-IJ Jewellers Choice Design Awards - 2016 • “TV CAMPAIGN OF THE YEAR” 12th Gemfields Retail Jeweller India Awards - 2016 • “DIAMOND JEWELLERY OF THE YEAR” 12th Gemfields Retail Jeweller India Awards - 2016 • “BEST NECKLACE DESIGN AWARD–
Slide 29: Thank You
THANK YOU Saurav Banerjee Nilesh Dalvi Chief Financial Officer IR Consultant Tribhovandas Bhimji Zaveri Limited Dickenson Seagull IR +91 022 30735000 +91 9819289131 saurav.banerjee@tbzoriginal.com nilesh.dalvi@dickensonir.com 29
Tribhovandas Bhimji Zaveri — H1 FY2018 Earnings Presentation on 6ix