Titan Company Limited · NSE:TITAN
Titan — Q2 FY2019 Earnings Presentation
60 slides from Titan's earnings presentation, Nov 9, 2018
Slide 1: Exchange filing cover letter
TITAN COMPANY SEC 41/2018-19 9th November 2018 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)
Slide 2: Earnings Presentation – Q2 FY'19 and H1 FY'19
Titan Company Limited Delivering value by creating brands Earnings Presentation – Q2 FY ’19 and H1 FY’19 (For quarter and half year, ended 30th September, 2018) 09th November, 2018 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: Table of Contents
Table of Contents • Overview – Company – Watches – Jewellery – Eyewear • Q2 Performance • Retail Growth • Financials : Q2’19 & H1’19 • Historical Performance Trends • Awards and Recognition • Sustainability at Titan 3
Slide 5: The Journey
The Journey 1984 1992 1998 Conceived 1987 Timex JV 1996 2003 2005 2008 2010 PED 2007 2009 Accessories 2011 2013 Perfumes 2016 4
Slide 6: Titan Today
Titan Today 5th ~$10 bn largest watch market cap maker globally ~$2.5 bn 4 annual revenue times in Forbes Asia Fab Fifty ~1,600 ~8 k stores with 2mn sft retail space employees on rolls 11k+ mutli-brand outlets 5 that sells our watches Note: Above figures are on consolidated basis as on 30th Sep’18.
Slide 7: Our Strengths
Our Strengths Design and Development 800+ New time products every year reddot Award to 2 Edge watches Differentiated Jewellery Collections Customized lenses with 3D visual mapping Manufacturing 12 Manufacturing and assembly facilities State of the art Karigar Centres for Jewellery Components exporte
Slide 8: Our Brands
Our Brands Luxury Premium Mid Market Mass Market 7
Slide 9: Our Retail Network
Our Retail Network Luxury (3) Premium (267) (72) (489) Mid Market (513) (173) (43) (45) ~1,600 Exclusive Stores 279 Towns ~2 mn sq. ft. of retail space Note: 1. We also have a service network of 730 ‘Watch Care Centres’ 2. Helios is our own Multi Brand Outlet (MBO) and rest others are our Exclusive
Slide 10: Watches - Overview
Watches - Overview Brands 6 major in-house brands & 6 licensed brands Manufacturing 6, state of the art, watch and component manufacturing/assembly plants Points of Sale EBO: World of Titan, Fastrack Stores OWN MBO: Helios MBO: present across 11k+ dealers/ MBOs LFS: Large format departmental stores
Slide 11: Watches - Brands
Watches - Brands Nebula: A collection of Raga: Inspired by the watches crafted from solid Xylys: Swiss made gold modern woman who watches, Crafted for transcends roles with poise Connoisseurs and élan Titan Edge : the slimmest Titan We: watch in the universe - a Smarter. By far. Fastrack Reflex Acti
Slide 12: Watches - Manufacturing
Watches - Manufacturing Watch factory, Hosur Pantnagar factory Roorkee Pantnagar • Sikkim Manufacturing/ Assembly facilities • Hosur 11 Watch Assembly, Hosur • Coimbatore
Slide 13: Watches - International Presence
Watches - International Presence 31 Countries 2279 Outlets Russia- 50 USA (through Amazon) Kuwait - 57 Myanmar-10 Pakistan- 32 Nepal - 45 Qatar - 94 Philippines- 135 Bahrain - 70 Bangladesh - 135 Saudi Arabia - 700 Thailand- 68 Bhutan – 8 Vietnam- 82 Nigeria- 10 Egypt- 20 Malaysia- 158 Sri Lanka- 80
Slide 14: World of Titan
WORLD OF TITAN 489 showrooms (Net 3 addition in H1 FY’19) 225 towns – 410k sq.ft. 13
Slide 15: Fastrack Stores
FASTRACK STORES 173 showrooms (Net 7 additions in H1 FY ‘19) 84 towns – 95k sq.ft. 14
Slide 16: Helios Stores
HELIOS STORES 72 showrooms (Net 2 additions in H1‘19) 36 towns – 67k sq.ft. 15
Slide 17: Titan Connected
0 TITAN CONNECTED Past ©2523 2\ 16
Slide 18: 17
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Slide 19: Jewellery
Jewellery Brands TANISHQ: flagship brand ZOYA: luxury segment play MIA: Tanishq sub-brand for faishonable fine jewellery CARATLANE: a Tanishq partnership, ecommerce brand Manufacturing Studded jewellery manufactures mostly in-house Plain gold jewellery mostly outsourced 3 manufacturing facilities 4
Slide 20: Jewellery
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Slide 21: Jewellery
Jewellery Karigar Center, Hosur • Pantnagar • Sikkim Manufacturing Facilities/ • Hosur Karigar Centers 20
Slide 22: Tanishq Stores
Tanishq Stores 267 showrooms of Tanishq (Net 14 added in H1’19). 167 towns – 1.04 mn sq.ft. of Tanishq (Net 35k sq.ft. added in H1‘19). 3 Zoya stores (~10K sq.ft.) 21
Slide 23: Mia Stores
Mia Stores 25 Standalone stores and 18 Shop-in-shops 19 cities (~10k sq.ft.) 22
Slide 24: Carat Lane Stores
Carat Lane Stores 45 showrooms across 15 towns (~32k sq.ft.) 23
Slide 25: View Advertisement
AINTOnY XK opresents OY UlSAVA
Slide 26: Impressions
IMPRESSIONS
Slide 27: Mia by Tanishq
(A TATA PRODUCT ' nar miabytanishq.com Rie FROM x [ANiSHQ Me In Action 26
Slide 28: Eye Wear
Eye Wear Brands TITAN EYE PLUS: Retail brand TITAN: main in-house frames and lenses brand FASTRACK and GLARES: in-house sunglasses brand LICENSED BRANDS: for frames and lenses Manufacturing State of the art lens lab in Chikkaballapur Satellite lens labs in major cities to improve turn around time Fr
Slide 29: Eye Wear
Eye Wear In-house brands Frames Sunglasses Manufacturing Integrated Eyewear facility - Chikkaballapura Lens Labs 28
Slide 30: Titan Eye Plus Stores
Titan Eye Plus Stores 513 showrooms (Net 13 additions in H1 ’19) 221 towns – 339k sq.ft. 29
Slide 31: Latest styles
Latest styles ab har budget ke liye! #GreatStylesGreatPrices * Styles so affordable, Lu you wont stop at one. #GreatStylesGreatPrices
Slide 32: Fastrack
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Slide 33: Fragrance
Fragrance Brands SKINN by Titan Fine French perfumes at very attractive price points Entry into body mist category in FY 18- Skinn Kissed Manufacturing Manufactured in France by celebrated perfumers, and distilled from the finest ingredients Bottled in France and India Points of Sale Sold through Wo
Slide 34: The New Colour of Class. Amalfi Bleu.
THE NEW COLOUR OF CLASS. AMALFI BLEU. - EAU DE TOILETTE ——— - 2 = ~ THE FRESH NEW FRAGRANCE FOR MEN AND WOMEN. SKI AN z 'Y TITAN, Fine French Perfumes
Slide 35: Taneira
Taneira Who we are • This youngest brand of Titan Company Ltd was launched as pilot in Feb 2017 with 2 stores in Bangalore. • Anchored in special occasion wear Sarees from across India. • Evolved as a natural extension of Titan’s proposition – self expression and design. • Large, unorganized, deeply
Slide 36: Our Stores
Our Stores 35
Slide 37: Titan Company Limited Q2 Performance
Titan Company Limited Q2 Performance 36
Slide 38: Q2 Performance - Standalone
Q2 Performance - Standalone Company • The Company continued to grow well across all of its businesses in the second quarter with the market share gains continuing particularly in Jewellery. Revenue grew by 26% and EBIT grew by 4%. • The Watch business is continuing its excellent run backed by a good
Slide 39: Q2 Performance - Standalone (Jewellery)
Q2 Performance - Standalone Jewellery • The Jewellery division had a strong quarter with revenue growth of 29% despite the muted growth witnessed by the industry with most of the growth coming from volume growth (24%). • Gross margin was lower than the previous year as plain jewellery segment grew m
Slide 40: Q2 Performance - Standalone (Watches, Eye Wear)
Q2 Performance - Standalone Watches • Watch division continued its good performance in the quarter, with growth of 17%, with the launch of many exciting products and improvement in merchandise to fill the product gaps. • While a robust growth was witnessed across all channels, the modern retail form
Slide 41: Q2 Performance – Subsidiaries and JV
Q2 Performance – Subsidiaries and JV Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL had an excellent quarter with the revenues growing by 88% YoY, helped by low base. Both the segments, aerospace and defence (A&D) and Automation solution business grew strongly and are exp
Slide 42: Retail Growth - Q2'19 and H1'19
Retail Growth - Q2‘19 and H1’19 Q2’19 H1’19 Sales value Like-to-Like Sales value Like-to-Like growth growth growth growth Tanishq 38% 32% 18% 14% World of Titan 8% 9% 6% 4% Fastrack 10% 6% 7% 1% Helios 45% 16% 35% 7% LFS (for 33% 26% 25% 20% Watches) Titan Eye+ 18% 8% 17% 8% Note: 1. Above retail gr
Slide 43: Total Income – Q2'19 and H1'19
Total Income – Q2’19 and H1’19 Total Income (1) Q2'18 Q2'19 Growth % H1'18 H1'19 Growth % (in INR Crores) Watches 576 676 17% 1,093 1,269 16% Jewellery 2,788 3,582 29% 6,168 7,154 16% Eyewear 101 120 19% 214 252 18% Others / Corporate (2) 44 56 28% 87 114 30% Standalone 3,508 4,434 26% 7,562 8,788 1
Slide 44: EBIT – Q2'19 and H1'19
EBIT – Q2’19 and H1’19 EBIT (in INR Crores) (1) Q2'18 Q2'19 Growth % H1'18 H1'19 Growth % Watches 91 122 33% 150 233 55% Jewellery 368 392 7% 707 785 11% Eyewear 1 (1) 5 1 Others/ Corporate (2) (21) (56) (31) (67) Standalone 439 456 4% 830 952 15% Caratlane (17) (12) (33) (20) TEAL 1 20 (3) 23 Other
Slide 45: P&L – Q2'19 and H1'19 – Standalone Company
P&L – Q2’19 and H1’19 – Standalone Company in INR Crores Q2'18 Q2'19 YoY H1'18 H1'19 YoY Revenue from operations 3,488 4,407 26% 7,514 8,726 16% Other Income 20 27 48 62 Total Income 3,508 4,434 26% 7,562 8,788 16% COGS 2,491 3,180 5,504 6,339 Gross Profit 1,017 1,253 23% 2,059 2,449 19% Employee be
Slide 46: Balance Sheet – Standalone
Balance Sheet – Standalone in INR Crores 31-Mar-18 30-Sep-18 Fixed Assets 985 1,001 Intangible Assets 30 41 Investments 734 744 Other non-current assets 370 337 Inventories 5,749 6,657 Trade Receivables 193 403 Cash and Cash Equivalents 466 240 Other Bank Balances 146 220 Other Current Assets 723 1,
Slide 47: Capital Employed - Standalone
Capital Employed - Standalone in INR Crores Segment Assets Segment Liabilities Capital Employed 31-Mar-18 30-Sep-18 31-Mar-18 30-Sep-18 31-Mar-18 30-Sep-18 Watches 1,354 1,620 448 475 906 1,145 Jewellery 5,611 6,748 3,536 4,740 2,076 2,008 Eyewear 287 322 81 94 206 228 Others 52 65 19 31 33 34 Corpo
Slide 48: Quarterly Performance Trends
Quarterly Performance Trends Company: Revenue 5,000 60% 50% 4,000 40% 30% Rs Crores 3,000 20% 2,000 10% 0% 1,000 -10% -20% 0 -30% 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 Net sales 2,663 3,405 2398 2,770 2,620 3,867 3,538 4,027 3,488 4,137 3,917 4,31
Slide 49: Quarterly Performance Trends – Watches
Quarterly Performance Trends Watches: Total Income 800 20.0% 700 15.0% 600 10.0% Rs Crores 500 5.0% 400 0.0% 300 200 -5.0% 100 -10.0% 0 -15.0% 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 Net sales 552 484 449 500 524 508 503 517 576 532 494 594 676 Grow
Slide 50: Quarterly Performance Trends – Jewellery
Quarterly Performance Trends Jewellery: Total Income 4,000 80.0% 3,500 60.0% 3,000 40.0% Rs Crores 2,500 2,000 20.0% 1,500 0.0% 1,000 500 -20.0% 0 -40.0% 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 Net sales 1,983 2,820 1847 2,151 1,988 3,255 2,913 3,38
Slide 51: Quarterly Performance Trends – Volume Growth
Quarterly Performance Trends Watches: Volume growth 25% 20% 15% 10% Growth (%) 5% 0% -5% -10% -15% -20% -25% 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 Volume Growth 0% 0% -19% 1% -9% 4% 10% 5% 9% 11% -1% 10% 21% Jewellery: Gold price (22kt) and Gramma
Slide 52: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone CAGR: 9% Revenue 18,000 15,656 16,000 14,000 12,999 11,903 12,000 10,916 11,105 (Rs Crores) 10,000 8,000 6,000 4,000 2,000 0 2013-14 2014-15 2015-16 2016-17 2017-18 CAGR: CAGR: 11% 4% Jewellery: Total Income Watches: Total Income 14,000 13,036 2,200 2,126 12,00
Slide 53: Annual Performance Trends - Standalone
Annual Performance Trends - Standalone CAGR: 13% Company: PBT Company: PAT CAGR: 1,800 12% 1,662 1,400 1,600 1,163 1,200 1,400 1,130 1,000 1,200 1,056 823 1,016 (Rs Crores) 762 (Rs Crores) 888 800 741 698 1,000 800 600 600 400 400 200 200 0 0 2013-14 2014-15 2015-16 2016-17 2017-18 2013-14 2014-15 2
Slide 54: Annual Performance Trends – Standalone
Annual Performance Trends – Standalone Capital Employed 6,000 5,194 5,000 4,312 4,000 3,551 3,321 (Rs Crores) 3,172 3,000 2,000 1,000 0 2013-14 2014-15 2015-16 2016-17 2017-18 ROCE ROE 40% 37.9% 35% 33.0% 35.1% 29.3% 35% 32.6% 30% 29.2% 24.5% 30% 25% 25.8% 21.1% 25% 19.4% 20% 20% 15% 15% 10% 10% 5%
Slide 55: Dividend
Dividend 10 year 350 CAGR: 24% 35.0% 300 30.0% 250 25.0% 200 20.0% (Rs Crores) 150 15.0% 100 10.0% 50 5.0% 0 0.0% 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Dividend 36 44 67 111 155 186 186 204 195 231 333 Payout Ratio-RHS 23.6% 27.9% 26.6% 25.8% 25.9% 2
Slide 56: Market Capitalisation
Market Capitalisation Stock Performance Vs Sensex (last 6 months) 90,000 83,656 10 year CAGR: 38% 80,000 71,520 70,000 60,000 (Rs Crores) Titan 50,000 Sensex 41,082 40,000 34,801 30,078 30,000 22,772 23,300 20,295 20,000 16,916 10,000 8,172 3,462 0 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 201
Slide 57: Awards and Recognitions won in 2018
Awards and Recognitions won in 2018 • Titan wins in Pitch Top 50 Brands in the ‘Evergreens Category’. • Fastrack wins at the Afaqs Foxglove awards 2018. • Fastrack wins bronze in the prestigious WOW Asia awards for The Fastrack Music Run. • Sonata wins the Best Brand Launch of the Year at the Brand
Slide 58: Sustainability @ Titan
Sustainability @ Titan Formally defined CSR Policy in line with the company’s vision The CSR focus at Titan will be driven by broad themes such as upliftment of the underprivileged girl child, Skill development for the under privileged and support for Indian Arts, Crafts and Heritage. Area Key Initi
Slide 59: View Mr. Bhaskar Bhat's message on ECHO initiative
View Mr. Bhaskar Bhat's message on ECHO initiative 58
Slide 60: Thank You
Thank You 4 TITAN COMPANY