Tribhovandas Bhimji Zaveri Limited · NSE:TBZ
Tribhovandas Bhimji Zaveri — H1 FY2016 Earnings Presentation
33 slides from Tribhovandas Bhimji Zaveri's earnings presentation, November 2015
Slide 1: Investor Presentation Q2 & H1 FY16 Results Update
INVESTOR PRESENTATION Q2 & H1 FY16 RESULTS UPDATE November, 2015
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 FY16 Results Update About Us Financial & Operational Summary Annexure
Slide 4: Q2 FY16 Results Update: Profit Analysis
Q2 FY16 RESULTS UPDATE PROFIT ANALYSIS (RS MN) 13.3% 12.0% 0.1% 3.0% 4,380 -2.8% 4,263 -0.2% 126 6 -9 -121 Q2 FY15 Q2 FY16 Q2 FY15 Q2 FY16 Q2 FY15 Q2 FY16 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATIONAL EFFICIENCY (%) Q2 FY16 4.0% 2.1% 1.4% 4.7% Q2 FY15 3.9% 2.8% 1.4% 2.3% Salarie
Slide 5: Q2 FY16 Results Update: Revenue Analysis
Q2 FY16 RESULTS UPDATE REVENUE ANALYSIS (RS MN) 25.1% 29.5% 8.6% 7.4% 3,441 3,032 1,185 879 Q2 FY15 Q2 FY16 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE (RS) Q2 FY16 Gold Diamond 1,63,123 % of Sales – Q2 FY16 78.6% 20.1% 1,27,919 83,830 84,859 % of Sales – Q2 FY15 71.1% 27.8% Sal
Slide 6: H1 FY16 Results Update: Profit Analysis
H1 FY16 RESULTS UPDATE PROFIT ANALYSIS (RS MN) 3.2% 0.1% 13.2% 13.7% 2.2% -1.1% 273 11 8,587 8,540 191 -94 H1 FY15 H1 FY16 H1 FY15 H1 FY16 H1 FY15 H1 FY16 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATIONAL EFFICIENCY (%) H1 FY16 3.9% 2.9% 1.5% 3.2% H1 FY15 3.5% 2.7% 1.4% 2.4% Salarie
Slide 7: H1 FY16 Results Update: Revenue Analysis
H1 FY16 RESULTS UPDATE REVENUE ANALYSIS (RS MN) 28.2% 30.9% 8.4% 9.2% 6,445 6,556 2,009 1,750 H1 FY15 H1 FY16 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE (RS) H1 FY16 Gold Diamond % of Sales – H1 FY16 76.8% 20.5% 1,45,061 1,29,102 % of Sales – H1 FY15 75.1% 23.4% 84,245 84,456 S
Slide 8: Balance Sheet Update
BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 6.0% 7.0% 42.9% 41.3% 44.0% 44.0% 51.1% 51.7% 56.0% 56.0% FY15 Sep-15 FY15 Sep-15 Others Diamond Gold Own Gold Gold on Loan LEVERAGE (RS MN) 1.3 1.4 1.1 1.1 1.2 6,232 6,222 5,169 5,507 5,031 4,646 4,683 4,477 4,554 4,572 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 E
Slide 9: Business Scenario
BUSINESS SCENARIO Sales during July and August displayed growth driven by drop in gold prices, however September month saw poor sales due to absence of any auspicious occasions. Diamond jewellery consumption witnessed decline due to weak consumer discretionary sentiments. The company signed it
Slide 10: Key Result Takeaways
KEY RESULT TAKEAWAYS REVENUES: Q2 FY16 sales grew by 2.7% YoY. Gold jewellery sales grew by 13.5%. Growth in volume terms was even higher considering that the average gold prices during Q2 were down 7% YoY. Diamond jewellery declined 25.8% driven by weak discretionary consumption sentiments.
Slide 11: Key Result Takeaways: Balance Sheet
KEY RESULT TAKEAWAYS BALANCE SHEET: The share of inventory on gold on loan increased from 49% as on Jun-15 to 56% as on Sep-15. The company’s endeavour is to further increase the share of gold on loan on an incremental basis. The company has maintained strong control on the inventory level. The
Slide 12: Results Update – September 2015
RESULTS UPDATE – SEPTEMBER 2015 Q2 FY16 Q2 FY15 Q1 FY16 H1 FY16 H1 FY15 FY15 PARTICULARS (IN MN) YoY % QoQ % YoY % (₹) (₹) (₹) (₹) (₹) (₹) Revenues 4,380 4,263 2.7% 4,159 5.3% 8,540 8,587 -0.6% 19,342 COGS 3,855 3,695 4.3% 3,515 9.7% 7,370 7,456 -1.2% 16,664 Gross Profit 525 568 -7.5% 644 -18.4% 1,1
Slide 13: Results Update – September 2015
RESULTS UPDATE – SEPTEMBER 2015 PARTICULARS (IN MN) SEP-15 JUN-15 MAR-15 DEC-14 SEP-14 (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Shareholders Funds 4,572 4,683 4,656 4,554 4,477 Loan Funds 6,525 6,545 5,832 5,614 5,654 Other Long Term Liabilities 28 56 26 49 47 Sources of Funds 11,125 11,284 10,514
Slide 14: Discussion Summary
DISCUSSION SUMMARY Q2 & H1 FY16 Results Update About Us Financial & Operational Summary Annexure
Slide 15: About Us: Why Is TBZ Different?
ABOUT US: WHY IS TBZ DIFFERENT ? Pedigree Strong Brand Value 150 years in jewellery business High sales productivity - First jeweller to offer buyback ₹ 254 k per sq ft per annum (at guarantee in 1938 mature stores) Professional organisation High footfalls conversion - 79% spearheaded by 5
Slide 16: About Us: Key Milestones
ABOUT US: KEY MILESTONES STRONG LEGACY OF AROUND 150 YEARS BUILT ON TRUST Flagship store Introduced 100% Diamond facility Retail footprint opened in Zaveri pre-hallmarked expansion - ~6k crosses 84k sq ft Bazaar, Mumbai jewellery to ~24k sq ft across 20 cities First Franchise First to launch Turnove
Slide 17: About Us: Shareholding Structure
ABOUT US: SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – SEP 2015 PUBLIC 9.66% INSTITUTIONAL PROMOTERS 90.34% KEY INSTITUIONAL INVESTORS % HOLDING Smallcap World Fund INC 6.50% HSBC Global Investments 3.57% Goldman Sachs India Fund 1.22% 17
Slide 18: About Us: Retail Presence
ABOUT US: RETAIL PRESENCE Present across 22 cities PAN-INDIA PRESENCE WITH 29 STORES in 10 states WITH A RETAIL SPACE OF ~95,200 SQ. FT. SPREAD ACROSS 22 CITIES IN 10 STATES. NUMBER OF STORES TILL DATE Large Format 23 Small Format 6 Tier I 17 Tier II 4 Metros 8 Total Stores 29 Total Area ~95,200 Ban
Slide 19: About Us: Retail Footprint Expansion
ABOUT US: RETAIL FOOTPRINT EXPANSION HIGH SALES PRODUCTIVITY (REVENUE / YEAR / SQ FT) 95,200 ₹301 91,058 88,093 ₹270 82,368 ₹255 ₹214 ₹ 216 ₹207 ** 44,196 47,796 27 28 29 25 14 14 FY11 FY12 FY13 FY14 FY15 H1 FY16 Carpet Area (sq ft) No. of Retail Outlets Revenue / average sqft * (₹ ’000 / sq ft) * A
Slide 20: Discussion Summary
DISCUSSION SUMMARY Q2 & H1 FY16 Results Update About Us Financial & Operational Summary Annexure
Slide 21: Financial Summary
FINANCIAL SUMMARY REVENUE (RS MN) EBITDA (RS MN) PAT (RS MN) 1,476 CAGR - 13% 1327 850 19,342 1,221 18,243 16,583 13,855 888 572 551 11,939 827 392 260 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 MARGINS (%) LEVERAGE & RETURN METRICS 45.1 42.9 18.8 29.8 17.5 16.9 15.7
Slide 22: Operational Summary
OPERATIONAL SUMMARY GOLD & DIAMOND VOLUMES GOLD & DIAMOND SALES MIX (%) 51,995 53,220 52,010 48,662 75% 77% 75% 73% 72% 43,808 4,706 4,361 4,110 3,654 3,710 22% 25% 23% 22% 21% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Gold Sales (Kgs) Diamond Sales (cts) Gold GOLD & DIAMOND MARGINS (%) OPER
Slide 23: Operational Summary
OPERATIONAL SUMMARY SSSG - TOTAL (%) SSSG - GOLD (%) SSSG - DIAMOND (%) 31.3 34.2 29.6 31.2 -5.1% 11.2 13.0 excl. coins 9.0 4.0 3.5 1.3 -0.2 -8.6 -9.9 -9.3 -15.8 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 AVERAGE TICKET SIZE (RS ‘000) FOOTFALLS & CONVERSION 141 87% 86
Slide 24: Thank You
THANKYOU Saurav Banerjee, CFO Nilesh Dalvi Tribhovandas Bhimji Zaveri Limited Dickenson Seagull IR +91 022 30735000 +91 9819289131 saurav.banerjee@tbzoriginal.com nilesh.dalvi@dickensonir.com
Slide 25: Annexure
ANNEXURE
Slide 26: Awards & Recognition
AWARDS & RECOGNITION “ASIA’S MOST POPULAR BRANDS – 2014 ” World Consulting & Research Corporation (WCRC) - 2014 “BEST JEWELLERY COMPANY AWARD” Gems & Jewellery Trade Council of India Excellence Awards - 2014 “BEST DIAMOND JEWELLERY & BRACELET DESIGN” Indian Jeweller Jeweller’s Choice Design Aw
Slide 27: Business Model: Product
BUSINESS MODEL: PRODUCT WEDDING (65%) GOLD Gross Margins – 11% (75%) Stock Turns – 2.5x - 3x FASHION (35%) WEDDING (40%) DIAMONDS Gross Margins – 35% (25%) Stock Turns – 1x FASHION (60%) WEDDING SALES TO DRIVE STRONG VOLUMES WEDDING & FASHION SALES TO DRIVE FUTURE GROWTH 27
Slide 28: Business Model: Manufacturing
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 29: Business Model: Manufacturing
BUSINESS MODEL: MANUFACTURING DIAMOND PROCUREMENT Raw Material - Cut & polished diamonds (VVS grade) Sources: DTC site holders Other vendors In-house diamond jewellery manufacturing leading to exclusive designs, lower costs, and higher margins MANUFACTURING Manufacturing facility at Kandiv
Slide 30: Business Model: Retail
BUSINESS MODEL: RETAIL EFFICIENT INVENTORY MANAGEMENT HUB & SPOKE MODEL - ROI OPTIMISATION SMALL STORES 1,000 - 1,500 sq ft Across the city SMALL Smaller range STORE Lower price points (up to ₹ 500k) Inventory - ₹ 93 mn Gold : Diamond - 70 : 30 SMALL LARGE FORMAT SMALL LARGE STORES STORE S
Slide 31: Business Model: Economics
BUSINESS MODEL: ECONOMICS PARTICULARS LARGE FORMAT SMALL FORMAT Size sq ft Above 3,000 1,000 – 1,500 Average Sales per sq ft in Year 1 (₹) 250,000 250,000 Gold : Diamond 75:25 75:25 Gross Margin - Gold : Diamond 11% : 35% 11% : 35% Blended Gross Margins 17.2% 17.2% Store Costs: Advertising 2.5% 2.5%
Slide 32: Business Model: Scalability
BUSINESS MODEL: SCALABILITY TBZ has an aggressive expansion plan of tripling its retail network from 50,000 sq ft in FY12 to around 150,000 sq ft. TBZ has a plan to open 43 new stores (25 large format stores with average space of 3,000 sq ft and 18 small format stores with average space of 1,000
Slide 33: 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
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