Tribhovandas Bhimji Zaveri Limited · NSE:TBZ
Tribhovandas Bhimji Zaveri — Q4 FY16 Earnings Presentation
33 slides from Tribhovandas Bhimji Zaveri's earnings presentation, May 2016
Slide 1: Investor Presentation Q4 & FY16 Results Update
INVESTOR PRESENTATION Q4 & FY16 RESULTS UPDATE May, 2016
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 & FY16 Results Update About Us Operational Summary Annexure
Slide 4: Business Scenario
BUSINESS SCENARIO Key regulatory measures introduced by the Government recently – Mandatory requirement for producing PAN Card details for all jewellery purchases above Rs 0.2 mn. 1% Excise Duty applicable on jewellery sales. Compulsory Hallmarking of gold jewellery. During the quarter end
Slide 5: Key Result Takeaways
KEY RESULT TAKEAWAYS REVENUES: Q4 FY16 sales declined by 34.1% YoY – Nation-wide agitation by the Gems & Jewellery industry in protest against imposition of 1% excise duty led to a loss of sales during the month of March. Accordingly, the financial results of the current quarter and year ended M
Slide 6: Key Result Takeaways
KEY RESULT TAKEAWAYS BALANCE SHEET: The average share of inventory on gold on loan improved to 60% in FY16. The company’s endeavour is to increase the share of gold on loan on an incremental basis. Inventory valuation increased primarily because increase in gold prices led to increase in the val
Slide 7: Q4 FY16 Results Update
Q4 FY16 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS *# 5.4% 4.0% 17.4% 13.8% 249 185 -5.6% 4,630 -0.2% 3,052 -7 -170 Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 Q4 FY15 Q4 FY16 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) *# Q4 FY16 5.7% 2.0% 2.1% 3.4% 4.5% Q4 FY15 2.6% 1.9% 1.4%
Slide 8: Q4 FY16 Results Update
Q4 FY16 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS *# 34.7% 29.2% 11.7% 9.5% 3,526 2,226 986 767 Q4 FY15 Q4 FY16 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE Q4 FY16 Gold Diamond % of Sales – Q4 FY16 73.0% 25.1% 1,24,165 1,28,228 91,664 84,984 % of Sales – Q4 FY15 76.2% 21.3% Sales
Slide 9: FY16 Results Update
FY16 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS *# 13.7% 14.2% 1.3% 3.9% 2.4% 260 -1.4% 19,342 748 16,548 396 -231 FY15 FY16 FY15 FY16 FY15 FY16 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) *# FY16 4.0% 3.1% 1.5% 2.7% 0.6% FY15 2.9% 3.3% 1.3% 2.3% Salaries Advertismen
Slide 10: FY16 Results Update
FY16 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS *# 29.3% 30.7% 9.0% 9.7% 14,566 12,581 4,335 3,553 FY15 FY16 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE FY16 Gold Diamond 1,39,446 1,32,054 % of Sales – FY16 76.0% 21.5% 84,995 83,826 % of Sales – FY15 75.3% 22.4% Sales Growth % *#
Slide 11: Balance Sheet Update
BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 6.0% 6.8% 42.9% 38.6% 56.0% 60.0% 51.1% 54.6% 44.0% 40.0% FY15 FY16 FY15 FY16 Gold Diamond Others Own Gold Average Gold on Loan LEVERAGE (RS MN) 1.3 1.4 1.4 1.2 1.2 5,507 6,232 6,222 6,121 5,482 4,656 4,683 4,572 4,616 4,424 Mar-15 Jun-15 Sep-15 Dec-15 Mar-
Slide 12: Results Update – March 2016
RESULTS UPDATE – MARCH 2016 PARTICULARS (IN MN) Q4 FY16 * Q4 FY15 FY16 * FY15 YoY % YoY % (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) Revenues 3,052 4,630 -34.1% 16,548 19,342 -14.4% COGS 2,521 3,993 -36.9% 14,195 16,701 -15.0% Gross Profit 531.0 637.3 -16.7% 2,353 2,641 -10.9% Gross Margin (%) 17.4% 13.8
Slide 13: Results Update – March 2016
RESULTS UPDATE – MARCH 2016 PARTICULARS (IN MN) MAR-16 * DEC-15 SEP-15 JUN-15 MAR-15 (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Shareholders Funds 4,424 4,617 4,572 4,683 4,656 Loan Funds 6,505 5,882 6,525 6,545 5,832 Other Long Term Liabilities 90 30 28 56 26 Sources of Funds 11,019 10,529 11,125 11
Slide 14: Estimated Impact of Loss of Revenues During Q4 FY16
ESTIMATED IMPACT OF LOSS OF REVENUES DURING Q4 FY16 In Rs Mn REPORTED LOSS OF SALES IN ADJUSTED Q4 FY16 RESULTS MARCH 2016 Q4 FY16 RESULTS SALES LOSS - AT AVERAGE REVENUES 3,052 MARCH 1,218 REVENUES 4,270 PRICES GM % 17.4% GM % 17.9% GM % 17.4% PBT -162 PBT + 218 PBT + 56 DISCLAIMER - The above scen
Slide 15: Discussion Summary
DISCUSSION SUMMARY Q4 & FY16 Results Update About Us Operational Summary Annexure
Slide 16: 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 ₹ 213 k per sq ft per annum (at guarantee in 1938 mature stores) Professional organisation High footfalls conversion - 78% spearheaded by 5
Slide 17: 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 18: About Us: Shareholding Structure
ABOUT US: SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – MARCH 2016 PUBLIC, 18.6% DII, 0.1% FII, 7.2% PROMOTER, 74.1% KEY INSTITUIONAL INVESTORS % HOLDING HSBC Global Investments 3.31% 18
Slide 19: About Us: Retail Presence
ABOUT US: RETAIL PRESENCE Present across 23 cities PAN-INDIA PRESENCE WITH 30 STORES in 10 states WITH A RETAIL SPACE OF ~98,200 SQ. FT. SPREAD ACROSS 23 CITIES IN 10 STATES. NUMBER OF STORES TILL DATE Large Format 24 Small Format 6 Tier I 17 Tier II 5 Metros 8 Total Stores 30 Total Area ~98,200 Ban
Slide 20: About Us: Retail Footprint Expansion
ABOUT US: RETAIL FOOTPRINT EXPANSION HIGH SALES PRODUCTIVITY (REVENUE / YEAR / SQ FT) 98,200 88,093 91,058 ₹ 301 82,368 ₹ 255 ₹ 214 ₹ 216 47,796 ₹ 175 *# 27 30 14 25 14 FY12 FY13 FY14 FY15 FY16 Carpet Area No. of Retail Outlets Revenue/average sqft (₹ '000/sq ft) • Average of retail area at the begi
Slide 21: Discussion Summary
DISCUSSION SUMMARY Q4 & FY16 Results Update About Us Operational Summary Annexure
Slide 22: Operational Summary
OPERATIONAL SUMMARY GOLD & DIAMOND VOLUMES *# GOLD & DIAMOND SALES MIX (%) 53,220 52,010 48,662 77% 43,808 75% 75% 76% 39,958 72% 4,361 4,706 4,216 3,654 3,710 25% 23% 21% 22% 22% FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 Gold Sales (kgs) Diamond Sales (cts) Gold Diamond GOLD & DIAMOND MARGI
Slide 23: Operational Summary
OPERATIONAL SUMMARY SSSG - TOTAL (%) *# SSSG - GOLD (%) *# SSSG - DIAMOND (%) *# 31.2 -5.1% excl. coins 9.0 11.2 3.5 13.0 1.3 4.0 -0.2 -9.3 -8.6 -9.9 -15.4 -15.8 -16.5 -20.8 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 FY12 FY13 FY14 FY15 FY16 AVERAGE TICKET SIZE (RS ‘000) FOOTFALLS & CONVERSIO
Slide 24: Thank You
THANKYOU Saurav Banerjee, CFO Nilesh Dalvi/Mandar Kapse Tribhovandas Bhimji Zaveri Limited Dickenson Seagull IR +91 022 30735000 +91 9819289131/+91 9867550004 saurav.banerjee@tbzoriginal.com nilesh.dalvi@dickensonir.com mandar.kapse@dickensonir.com
Slide 25: Annexure
ANNEXURE
Slide 26: Awards & Recognition
AWARDS & RECOGNITION “BEST NECKLACE DESIGN AWARD– 2016 ” JJS-IJ Jewellers’ Choice Design Award - 2016 “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 “BE
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 expansion plan to increase its retail space from ~98,200 sq. ft. at present to around 150,000 sq. ft. by FY18. TBZ plans to carry out 75% of the expansion through the franchisee route and balance 25% through the addition of its own stores. All the prospec
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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