Kddl Limited · NSE:KDDL
Kddl — Q4 & FY2019 Earnings Presentation
41 slides from Kddl's earnings presentation, May 29, 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/2019-20/17 Date : 28th May, 2019 National Stock Exchange of India Limited BSE Limited, Exchange Plaza,
Slide 2: KDDL Limited & Ethos Limited Result Update Presentation
KDDL Limited & ETHOS Limited Result Update Presentation May 2019 Q4 & FY19
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which has been prepared by 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
Slide 4: FY19 Performance Overview
D FY19 Performance Overview
Slide 5: Business Momentum continues
Business Momentum continues Standalone Performance Revenue (Rs. Cr) EBITDA (Rs. Cr) PAT (Rs. Cr) +20% +18% +12% 175.2 32.5 15.8 145.8 27.4 14.1 FY18 FY19 FY18 FY19 9MFY18 9MFY19 Ethos Performance (Consolidated) Revenue (Rs. Cr) Normalized EBITDA (Rs. Cr) PAT (Rs. Cr) +24% +97% +226% 445.1 36.3 13.2
Slide 6: Performance Highlights
Performance Highlights FY19 vs FY18 (Consolidated) Debt/Equity ROCE % 0.97 +50bps 0.75 17.8% 18.3% FY18 FY19 FY18 FY19 ▪ Strong Performance in Watch Retailing Business; Billings growth of 22%, EBITDA margin at 7.6% and PAT growth of 226% ▪ Manufacturing Business in India grew 20% with stable EBITDA
Slide 7: Standalone P&L
Standalone P&L Standalone Rs. Crs Q4FY19 Q4FY18 YoY% FY19 FY18 YoY% Revenue 44.6 38.5 16% 175.2 145.8 20% Cost of Goods Sold 13.5 8.7 44.6 33.7 Gross Profit 31.1 29.8 4% 130.6 112.2 16% Employee Expenses 10.7 11.6 49.1 42.7 Other Expenses 11.7 11.4 49.1 42.1 EBITDA 8.8 6.8 28% 32.5 27.4 18% Margin (
Slide 8: Consolidated P&L
Consolidated P&L Consolidated Commentary Rs. Crs Q4FY19 Q4FY18 YoY% FY19 FY18 YoY% Revenue 150.2 138.1 9% 624.2 501.8 24% Cost of Goods Sold 82.5 81.9 360.9 301.9 ▪ Consolidated Performance in Q4 was Gross Profit 67.8 56.2 20% 263.3 199.9 32% impacted on account of 2 factors Employee Expenses 24.7 1
Slide 9: 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 10: Manufacturing Business Overview
Manufacturing Business Overview
Slide 11: 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 12: 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 13: 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 14: Precision Engineering Expansion
Precision Engineering Expansion Investment Production Capabilities Invested Rs. 30 cr Injection Moulding, over 2 years. Electroplating, ~2 acre land at additional Stamping Bengaluru, capacity and Tool Karnataka Room upgrade Margins Clients Automobiles, Strong RFQs Defence, Hitech domestic & globally
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: FY19 Snapshot
—_— i |] | WATCH BOUTIQUES Ethos: FY19 Snapshot
Slide 17: Record Performance in FY19
Record Performance in FY19 FY19 vs FY18 (Consolidated*) Billings (Rs. Cr) Revenue (Rs. Cr) +22% +24% 512.9 445.1 420.0 357.8 FY18 FY19 FY18 FY19 Normalized EBITDA (Rs. Cr) PAT (Rs. Cr) +97% +226% 36.3 13.2 18.5 4.0 FY18 FY19 FY18 FY19 16 *Consolidated Financials include Watch Retailing Business and
Slide 18: Record Performance in FY19
Record Performance in FY19 FY19 vs FY18 (Consolidated*) Debt/Equity ROCE % ROE % 0.69 +668bps +544 bps 0.58 14.0 9.8 7.3 4.4 FY18 FY19 FY18 FY19 FY18 FY19 ▪ Reported Strong performance in FY19 on a high base of FY18. Benefits of scale and long term relationships with Watch Brands have helped to repo
Slide 19: Consolidated Profit & Loss
Consolidated Profit & Loss Particulars (Rs. Crores)* Q4FY19 Q4FY18 YoY % FY19 FY18 YoY % Revenue 102.9 97.4 6% 445.1 357.8 24% Cost of Goods Sold 68.1 71.5 315.9 271.8 Gross Profit 34.8 25.8 35% 129.2 86.1 50% Employee Expenses 11.3 6.0 33.4 22.6 Other Expenses 18.2 13.9 61.8 47.5 Reported EBITDA 5.
Slide 20: 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 21: Consolidated Performance Reconciliation
Consolidated Performance Reconciliation Particulars (Rs. Crores) Q4FY19 Q4FY18 YoY % FY19 FY18 YoY % Commentary Ethos Ltd - Watch Retailing Revenue 102.9 97.4 6% 443.4 357.8 24% Cognition - Digital Marketing Revenue 1.3 - 8.7 - ▪ Standalone Watch Retailing EBITDA in Less: Inter company transactions
Slide 22: Reconciliation to Consolidated Normalised EBITDA
Reconciliation to Consolidated Normalised EBITDA Particulars (Rs. Crores)* FY19 FY18 Revenue 445.1 357.8 Cost of Goods Sold 315.9 271.8 Employee Expenses 33.4 22.6 Other Expenses 59.5 45.0 Normalized EBITDA 36.3 18.5 Normalized EBITDA % 8.2% 5.2% Forex Items 1.3 2.0 Credits written off - 0.6 Provisi
Slide 23: Standalone Profit & Loss
Standalone Profit & Loss Particulars (Rs. Crores)# Q4FY19 Q4FY18 YoY % FY19 FY18 YoY % Revenue 102.9 97.4 6% 443.4 357.8 24% Cost of Goods Sold 68.1 71.5 315.9 271.8 Gross Profit 34.8 25.8 35% 127.5 86.1 48% Employee Expenses 10.7 6.0 32.4 22.6 Other Expenses 17.6 13.9 64.5 47.5 Reported EBITDA 6.4
Slide 24: Standalone Balance Sheet
Standalone Balance Sheet Particulars (Rs. Crores)# Mar-19 Mar-18 Shareholder’s Fund 132 92 Share Capital 17 16 Other Equity 115 76 Non-current liabilities 16 13 Long Term borrowings 14 11 Long Term Provisions 2 1 Current liabilities 149 146 Short Term Borrowings 53 41 Trade Payables 68 77 Other Curr
Slide 25: Largest Pan India retailer of Luxury Watches
Largest Pan India retailer of Luxury Watches Additions Panerai Boutique, Chanakyapuri, Delhi Oris Boutique, Palladium Mall, Chennai Stores as of FY18 Multi Brand Boutique, 43 Palladium Mall, Chennai Rado Boutique, Viviana Mall, Stores as of FY19 Thane 47 With 47 pan India stores, Ethos offers the wi
Slide 26: Fund Raise strengthens Balance Sheet
Fund Raise strengthens Balance Sheet Rs. 29cr Rs. 480cr 72.53% 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. 480 crores Ethos Ltd on fully diluted basis Equity Funds will primarily be utilize
Slide 27: New Initiatives in FY19
New Initiatives in FY19 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
Slide 28: Operational Snapshot
=~ LI WATCH BOUTIQUES Operational Snapshot
Slide 29: Ethos - Performance Trend
Ethos - Performance Trend* Revenue (Rs. Cr) Front-end Rent & Manpower Cost as % of Revenue# +24% 445.1 11.7% 11.7% 11.4% 357.8 10.1% 10.1% 328.7 327.0 281.0 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 EBITDA (Rs. Cr) EBITDA Margin +114% 34.0 7.6% 5.1% 4.5% 14.3 15.9 2.2% 7.3 3.3 1.0% FY15 FY16
Slide 30: Ethos - Online Sales Trend
Ethos - Online Sales Trend Online Billings (Rs. Cr) Online Billing as % of Total Billing +4% 31.8% 32.4% 30.7% 136.0 141.4 27.6% 113.6 116.0 24.2% 76.3 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 Visitors (‘000) +12% 14,735 13,191 10,001 7,887 5,901 FY15 FY16 FY17 FY18 FY19 29
Slide 31: Ethos - Repeat Sales Trend
Ethos - Repeat Sales Trend Club ECHO Member Base Repeat Billings (Rs. Cr) 216,704 175.8 184,891 154,357 128.3 70.8 Mar’17 Mar’18 Mar’19 FY17 FY18 FY19 30
Slide 32: Ethos is India's Largest Luxury Watch Retailer
Ethos is India’s Largest Luxury Watch Retailer 31
Slide 33: Pan-India Presence with Offline Store Network
Pan-India Presence with Offline Store Network India’s Largest retail chain of Luxury Watches with 47 stores Ludhiana Chandigarh Presence across Metros, Tier I, Tier II cities New Delhi Gurugram Noida Jaipur Lucknow 1 Duty Paid Retail Outlet at Domestic Bhopal Terminals Ahmedabad Indore Nagpur Pune 2
Slide 34: Regulatory Headwinds of the Past
Regulatory Headwinds of the Past… JAN - 16 NOV - 16 FEB - 18 Requirement of Pan JUN - 16 Demonetization of Increase in Cards for transactions Tax Collection at high value currency NOV - 17 Customs Duty on higher than Rs. 2 lakh Source requirement for GST rate revision Imported Watches all cash trans
Slide 35: thus validating our Business Strategy
thus validating our 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 al
Slide 36: 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 37: 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 38: and Continued Investments in Advertising
and Continued Investments in Advertising… Print Ads in leading newspapers… … with ETHOS co-branding 37
Slide 39: and TRUST CAMPAIGN across channels
and TRUST CAMPAIGN across channels… … to Educate consumers about Watches … to Create Awareness about unscrupulous activities … To Reinforce our “ETHOS” 38
Slide 40: 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 39
Slide 41: 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