Titan Company Limited · NSE:TITAN
Titan — Investor Presentation (June 2020)
42 slides from Titan's investor presentation, Jun 9, 2020
Slide 1: Exchange filing cover letter: Investor presentation
SEC 14 / 2020-21 9th June 2020 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), Dalal Street,
Slide 2: Titan Company Limited Business Outlook
Titan Company Limited Business Outlook 9th June, 2020 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: Retail Sales Trend H2 FY20
Retail Sales Trend H2 FY20 _Shanmete [gg an a WOT 11% 5% -77% Helios 23% 23% -75% LFS 6% 5% -92% Tanishq 15% 12% -74% Caratlane 71% 36% -81% Eye Plus 11% 8% -74%
Slide 5: FY21 Status
FY21 Status • Corporate office working for a month now; most other offices also started working except Mumbai • All safety procedures being followed thoroughly • Most plants started working as well • More than 1400 stores out of 1800 already open • Safety protocol in stores a highpoint; customers ve
Slide 6: Sales Recovery Rate, after 4 weeks of opening
Sales Recovery Rate, after 4 weeks of opening ADS - Average Daily Sales 5
Slide 7: Sales Recovery
Sales Recovery Very encouraging! 6
Slide 8: Challenges for FY21
Challenges for FY21 • Most products discretionary in nature, people likely to re-prioritise • Travelling out and shopping in stores likely to also come under some pressure on account of worries of safety • Most products still in the touch-and-feel category, so pure on-line is likely to be a challeng
Slide 9: Opportunities on the Demand Side
Opportunities on the Demand Side • Jewellery • Store of value, improving asset class perception • Large scale weddings are out, leaving more funds for streedhan • Substantial reduction in holiday travel can lead to a wallet share gain for jewellery • Greater push of Exchange given the huge household
Slide 10: Opportunities on the Demand Side
Opportunities on the Demand Side Trust of Titan and Tata will kick in much more 9
Slide 11: Opportunities on the Delivery Side
Opportunities on the Delivery Side • Omni-channel • Video Demonstration • AR/VR • Try @ Home • Endless Aisle • Big potential to use customer testimonials on safety to lower barriers of visiting stores 10
Slide 12: Operations
Operations • War on Waste programme to extract substantial value from Opex and Assets 11
Slide 13: Target: Normalcy by Q4
TITAN COMPANY Target Normalcy by Q4
Slide 14: Jewellery Division – Theme for FY21
Jewellery Division – Theme for FY21
Slide 15: Covid-19 has deepened industry stress seen in FY20
Covid -19 has deepened industry stress seen in FY20 FY20: Challenges • Macro headwinds Emerging themes Demand pressure • Industry decline Pressure on Margins • Gold price spikes 1. Agile response Capital employed to a new • Competitive intensity customer reality • Higher old Gold exchange Opportunit
Slide 16: Post COVID: Time to widen the Moat
Post COVID: Time to widen the Moat 1. Build customer confidence – “safest store in town” 2. Leap ahead: Omni & Remote selling – NEW Engine 3. Grow the Core (lower price bands) - NEW Engine 4. Agile response to differential geographic opportunities 5. Build confidence & support to partner ecosystem 6
Slide 17: ~75% of Stores re-opened, 90% by June end
~75% of 460 Stores re-opened, 90% by June end • 280+ stores out of 329 open. 300 stores by June end • 192 cities out of 200 • 3 stores out of 4 open. • 9 stores out of 38. Most mall stores yet to open • 54 stores out of 92. Mall stores to open gradually • Hosur, Pantnagar, Sikkim: 33% workforce Mfg
Slide 18: Early indicators point to positive outlook
Early indicators point to positive outlook Encouraging sales recovery rate Customers confidence on “Tanishq Gold Std” safety protocol Golden Harvest sustained Wedding purchase enquiries, Personal milestone purchases Outstanding e-AT, Website visitors ~ 2.5 Mn / mth High interest in gold
Slide 19: Most Growth Engines firing well. New engines added.
Most Growth Engines firing well. New engines added. No Growth Engine FY19 FY20 FY21 > FY22 1 Retail expansion (stores) 36 41 ~ 25 40+ H2 2 Wedding onwards Headroom 3 High value studded 4 Golden Harvest 5 Gold Exchange 6 Low share Markets Redefine 7 Grow the Core New 8 Leap ahead: Omni, Remote New
Slide 20: Play Qtr. to Qtr. Hope to exit Q4 of FY21 on track
Play Qtr. to Qtr. Hope to exit Q4 of FY21 on track • Last 5 weeks, Recovery rate ~ 70% • Festive Q3: – Gifting; Feel-good post hardship, – Gold: auspicious + asset value • Weddings H2: – Benefit of deferred demand from Q1 – Share of Wallet gain • Design: Create desire at affordable price points • By
Slide 21: Intense focus on Efficiency
Intense focus on Efficiency Sustain margin Drive Capital efficiency (-) Pressure on gross margins: • New stock norms – Studded ratio – Gold margins (high Gold prices) • Lead time reduction • One time gold re-sale (+) Offset by War on waste: – Re-imagine fixed cost base • Maximise GOL – Optimize Vari
Slide 22: Strengthened Risk mgmt.: Respond with agility
Strengthened Risk mgmt.: Respond with agility Key Risks Impact Mitigation Slower demand recovery pattern Topline Qtrly biz plans. Nimble response Larger gold price spike Topline, Product strategy, Promotions Capital Gold import restrictions GC, Capital Drive Exchange aggressively Supply side disrupt
Slide 23: We are best poised to Leap ahead
We are best poised to Leap ahead Trusted player. Tata emotional connect even stronger now. “Safest Stores in Town” Purity, Best old Gold Exchange Policy 18 mn Encircle , Large Golden Harvest base Responsible player, with sustainable practices Strong Franchisee network Professional, eng
Slide 24: Watches & Wearables | Jun 2020
WATCHES & WEARABLES | Jun 2020 23
Slide 25: Year 19-20: good year despite challenges
Year 19-20: good year despite challenges 7% growth in topline despite March lockdown; 9% growth in PBT Desirable Brands, Stronger Play in Leveraging Superior Design Smart Wearables Multiple Channels • Design differentiated collections • Acqui-hire of Hug Technologies • WOT, Helios & LFS grew through
Slide 26: Estimated Segment Behaviour
Estimated Segment Behaviour Segments Reality Sentiment Upper Middle Class Business/Industrialists High High Upper Middle Class Salaried High Medium Self-Employed Doctors, Lawyers, Accountant (more steady income) Medium Medium Middle Class Salaried - PVT Medium Medium First Jobbers: IT/ITES Medium Me
Slide 27: Green Shoots of Desire
Green Shoots of Desire Celebrate festivals: Raksha Celebrate small pleasures/ moments Bandhan, Father’s Day, Onam, birthdays, achievements, Durga Puja, Karva Chauth, Diwali anniversaries Revenge shopping Indian brands are flying high Premium segment recovery Great hook for our brands as they all hav
Slide 28: Retail Activities
Retail Activities Social distancing 30 to 50% of staff Contactless transactions Health & Hygiene Customer Communication Sanitisation of all surfaces and products Safety standards communication Daily temperature check An industry benchmark experience Stay Connected Regular Webinars | Trainings Cascad
Slide 29: Safe to Shop
Safe to Shop + TITAN COMPANY HSllos THE WATCH STORE 28
Slide 30: Back in Business
Back in Business Channel Number of Stores Percentage of stores Current vs Pre-Covid sale open open Retail 576 74% 48% Trade 3480 50% 30% Large Format Stores 32 11% 14% Marketplace Ecommerce - - 77% Brand Ecommerce - - 86% Walk-ins ramped up faster in Double-digit growth in average upcountry towns vs
Slide 31: Brand Portfolio Approach
Brand Portfolio Approach Celebrating Relationships We will win together Humour and quirk for Gen Z Gifting Trust and value Reflex fitness bands; Masks Differentiated hi-value products Indian progress Fashion forward 30
Slide 32: Omni Channel: Live in 165 Stores
Omni Channel: Live in 165 Stores Buy Online Reserve Online Pickup in Store Pickup in Store Video Shopping Endless Aisle Ship From Store Ship By Store www.titan.co.in www.sonatawatches.in www.fastrack.in 31
Slide 33: Divisional Business Directions
Stimulate demand for the category in the consumer’s Play our brand and mind in the post channel portfolio to our lockdown period: advantage Embrace digital Use Trust, Emotion, India in all areas to DIVISIONAL Keep partner arrive at hybrid model: Omni, BUSINESS ecosystem afloat DIRECTIONS and motivat
Slide 34: Eyewear
Eyewear
Slide 35: Content
Content • FY20 highlights • Market : Opportunity & Challenges • Lockdown & Recovery • FY21 outlook • Thrust Areas 34
Slide 36: Highlight 1920
Highlight 1920 Turnover (UCP) Rs 944 cr Growth 6%, TEP retail 11% (LTL – 6%) 60 stores added, Count 584 Customer NPS 72, Franchisee 33 Signature Frame, Smart Eyewear & Clear Sight lens High decibel Ayushman campaign 35
Slide 37: Market: Opportunity & Challenges
Market: Opportunity & Challenges • 550 mn Indians need vision correction – adoption 170 mn, opportunity continues • Market size: est 11,000 cr • Covid changed everything • In a way a new beginning! 36
Slide 38: Lockdown
Lockdown • Half Million empathy calls by our staff, warmed up many hearts, 6% needed a solution, one went viral, many appreciations • Remote sales process – assisted Ecom • Gathered all the best practices within the system, prepared ourselves 37
Slide 39: Recovery
Recovery • 1st store opened at Haridwar on 6th May, today 412/584 30% 29% 22% 19% 123 119 92 78 >100% 75%-100% 50%-75% <50% • May ADS of 60% wrt Feb’20 for the open stores • June is looking better 38
Slide 40: Early Trends
Early Trends Hygiene, Health & Safety - Top in customers’ mind 50% of stores reached almost Feb ADS Online order grew by 5X – assisted ecom is the new way Trade came to a grinding halt, could be a long haul Malls & LFS are just about starting, wait and watch 39
Slide 41: Thrust Areas
Thrust Areas Customer Product Channel Cost Control TEP Focus Convert/Exit unprofitable stores Efficient Scale down / exit Assortment - TOC Trade, LFS, market Centralized lens place fixing Consolidate lens lab Localization - IH manufacture & India sourcing 40
Slide 42: Thank You
Thank You