Tribhovandas Bhimji Zaveri Limited · NSE:TBZ
Tribhovandas Bhimji Zaveri — Q4 FY17 Earnings Presentation
31 slides from Tribhovandas Bhimji Zaveri's earnings presentation, May 2017
Slide 1: Investor Presentation Q4 & FY17 Results Update
INVESTOR PRESENTATION Q4 & FY17 RESULTS UPDATE May 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 Q4 & FY17 Results Update About Us Operational Summary Annexure
Slide 4: Key Highlights
KEY HIGHLIGHTS • Q4 FY17 Revenues grew by 26% YoY to ₹ 3,842 Mn Revenues • FY17 Revenues grew by 3% YoY to ₹ 17,002 Mn • Q4 FY17 EBITDA turned positive to ₹ 147 Mn EBITDA • FY17 EBITDA grew by 82% YoY to ₹ 722 Mn • Q4 FY17 PAT grew by 133% YoY to ₹ 56 Mn PAT • FY17 PAT grew by 180% YoY to ₹ 185 Mn •
Slide 5: Q4 FY17 Results Update: Profit Analysis
Q4 FY17 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS 17.4% 14.5% 3.8% 1.5% 3,842 56 -0.2% 147 -5.6% 133 % 3,052 26 % -7 -170 Q4 FY16 Q4 FY17 Q4 FY16 Q4 FY17 Q4 FY16 Q4 FY17 Net Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) Q4 FY17 5.2% 1.6% 1.9% 2.0% Q4 FY16 5.7% 2.0% 2.
Slide 6: Q4 FY17 Results Update: Segment Analysis
Q4 FY17 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS 11.7% 9.8% 34.7% 31.9% 2,934 767 813 2,226 32 % 6% Q4 FY16 Q4 FY17 Q4 FY16 Q4 FY17 Gold Sales Gold GM Diamond Sales Diamond GM AVERAGE TICKET PRICE Q4 FY17 Gold Diamond % of Sales – Q4 FY17 76.4% 21.2% 128,061 126,368 84,526 84,670 % of Sales – Q4 FY1
Slide 7: FY17 Results Update: Profit Analysis
FY17 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS 14.2% 14.6% 1.1% 4.2% 2.4% 185 722 16,548 17,002 -1.4% 180 % 396 3% 82 % -231 FY16 FY17 FY16 FY17 FY16 FY17 Net Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) FY17 4.4% 2.2% 1.4% 2.4% 0.6% # FY16 4.0% 3.1% 1.5% 2.7% Salari
Slide 8: FY17 Results Update: Segment Analysis
FY17 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS 10.8% 30.7% 28.9% 9.7% 12,581 12,543 3,553 3,760 0.3 % 6% FY16 FY17 FY16 FY17 Gold Sales Gold GM Diamond Sales Diamond GM AVERAGE TICKET PRICE FY17 Gold Diamond % of Sales – FY17 73.8% 22.1% 121,975 115,213 % of Sales – FY16 76.0% 21.5% 73,172 80,033 SS
Slide 9: Balance Sheet Update
BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 6.8% 8.2% 38.6% 37.8% 51.4% 59.0% 54.6% 54.0% 48.6% 41.0% Mar-16 Mar-17 Mar-16 Mar-17 Gold Diamond Others Own Gold Gold on Loan LEVERAGE (RS MN) 1.4 1.5 1.4 1.1 1.1 6,121 6,462 6,405 4,424 4,449 4,492 4,553 5,031 4,610 5,170 Mar-16 Jun-16 Sep-16 Dec-16 Mar-
Slide 10: Key Result Takeaways
KEY RESULT TAKEAWAYS REVENUES: Q4 FY17 revenues increased by 26% YoY – In the aftermath of the withdrawal of high denomination banking notes in October 2016, the jewellery sales displayed gradual growth in Q4 FY17. Jewellery sales were driven by an extended wedding season and higher redemption
Slide 11: Results Update – March 2017
RESULTS UPDATE – MARCH 2017 PARTICULARS (IN MN) Q4 FY17 Q4 FY16 YoY % FY17 FY16 YoY % (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) Net Revenues 3,842 3,052 25.9% 17,002 16,548 2.7% COGS 3,284 2,521 30.3% 14,519 14,195 2.3% Gross Profit 558 531 5.0% 2,484 2,353 5.6% Gross Margin (%) 14.5% 17.4% -288 bps 14.
Slide 12: Results Update – March 2017 (Balance Sheet)
RESULTS UPDATE – MARCH 2017 PARTICULARS (IN MN) MAR-17 DEC-16 SEP-16 JUN-16 MAR-16 (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Shareholders Funds 4,610 4,553 4,492 4,449 4,424 Loan Funds 5,476 5,341 6,731 6,704 6,505 Other Long Term Liabilities 91 98 102 95 90 Sources of Funds 10,176 9,992 11,326 11,2
Slide 13: Discussion Summary
DISCUSSION SUMMARY Q4 & FY17 Results Update About Us Operational Summary Annexure
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 High footfalls conversion - 80% guarantee in 1938 High ticket size - Gold - ₹ 80 k, Professional organisation Diamond - ₹ 115 k spearhe
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 Second opened in Zaveri pre-hallmarked expansion - ~6k First across 20 cities Franchise Store Bazaar, Mumbai jewellery to ~24k sq ft Franchi
Slide 16: About Us: Shareholding Structure
ABOUT US: SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – MAR 2017 PUBLIC, 23.2% DII, 0.1% FII, 2.6% PROMOTER, 74.1% 16
Slide 17: About Us: Retail Presence
ABOUT US: RETAIL PRESENCE Present across 26 cities PAN-INDIA PRESENCE WITH 33 STORES in 11 states WITH A RETAIL SPACE OF ~1,08,948 SQ. FT. SPREAD ACROSS 26 CITIES IN 11 STATES NUMBER OF STORES TILL DATE Large Format 28 Small Format 5 Patna Total Stores 33 Jamnagar Ranchi Total Area ~1,08,948 Bandra
Slide 18: About Us: Retail Footprint Expansion
ABOUT US: RETAIL FOOTPRINT EXPANSION SALES PRODUCTIVITY (REVENUE / YEAR / SQ FT) 102,930 91,058 98,200 82,368 88,093 ₹ 301 ₹ 255 ₹ 214 ₹ 216 47,796 ₹ 175 * ₹ 170 * 28 30 32 25 27 14 FY12 FY13 FY14 FY15 FY16 FY17 Carpet Area No. of Retail Outlets Revenue/average sqft (₹ '000/sq ft) NOTE: * During the
Slide 19: Discussion Summary
DISCUSSION SUMMARY Q4 & FY17 Results Update About Us Operational Summary Annexure
Slide 20: Operational Summary
OPERATIONAL SUMMARY GOLD & DIAMOND VOLUMES * GOLD & DIAMOND SALES MIX (%) 52,010 48,662 75% 43,808 77% 76% 76% 39,958 40,762 75% 4,361 4,706 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: SSSG and Ticket Size
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: 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 23: Annexure
ANNEXURE
Slide 24: 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 25: 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 25
Slide 26: 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 27: Business Model: Manufacturing (Diamond)
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 28: Business Model: Retail
BUSINESS MODEL: RETAIL EFFICIENT INVENTORY MANAGEMENT HUB & SPOKE MODEL - ROI OPTIMISATION SMALL STORES 1,000 - 2,000 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 29: Business Model: Economics
BUSINESS MODEL: ECONOMICS PARTICULARS LARGE FORMAT SMALL FORMAT Size sq ft Above 2,000 1,000 – 2,000 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 30: Business Model: Scalability
BUSINESS MODEL: SCALABILITY TBZ has an expansion plan to increase its retail space from ~1,08,948 sq. ft. at present to around 150,000 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 th
Slide 31: 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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