Titan Company Limited · NSE:TITAN
Titan — Q3 FY2019 Earnings Presentation
57 slides from Titan's earnings presentation, Feb 1, 2019
Slide 1: Exchange filing cover letter for investor presentation
♦ TITAN COMP/\NY SEC 58 / 2018-19 1st February 2019 The General Manager, DCS - CRD The General Manager, DCS - CRD BSE Limited National Stock Exchange oflndia Ltd Corporate Relationship Department Exchange Plaza, 1st Floor, New Trading Ring Bandra-Kurla Complex, Rotunda Building, P J Towers Bandra (E
Slide 2: Earnings Presentation – Q3 FY'19 and 9 Months FY'19
Titan Company Limited Delivering value by creating brands Earnings Presentation – Q3 FY ’19 and 9 Months FY’19 (For quarter and 9 months ended 31tstDecember, 2018) 01st February, 2019 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: The Journey
The Journey 1984 1992 1998 Conceived 1987 Timex JV 1996 2003 2005 2008 2010 PED 2007 2009 Accessories 2011 2013 Perfumes 2016 2017 3
Slide 5: Titan Today
Titan Today 5th ~$12 bn largest watch market cap maker globally ~$2.4 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 4 that sells our watches Note: Above figures are on consolidated basis as on 31st Dec’18.
Slide 6: 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 7: Our Brands
Our Brands Luxury Premium Mid Market Mass Market 6
Slide 8: Our Retail Network
Our Retail Network Luxury (3) Premium (277) (73) (4) (491) Mid Market (525) (175) (48) (50) ~1,600 Exclusive Stores 281 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 Exclus
Slide 9: 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 10: 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 11: Watches - Manufacturing
Watches - Manufacturing Watch factory, Hosur Pantnagar factory Roorkee Pantnagar • Sikkim Manufacturing/ Assembly facilities • Hosur 10 Watch Assembly, Hosur • Coimbatore
Slide 12: 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 13: World of Titan showrooms
WORLD OF TITAN 491 showrooms (Net 5 addition in 9M FY’19) 225 towns – 409k sq.ft. 12
Slide 14: Fastrack Stores
FASTRACK STORES 175 showrooms (Net 9 additions in 9M FY ‘19) 83 towns – 94k sq.ft. 13
Slide 15: Helios Stores
HELIOS STORES 73 showrooms (Net 3 additions in 9M FY‘19) 36 towns – 67k sq.ft. 14
Slide 16: Titan Raga
TITAN ®G TITAN RAGA LA #FlauntYourFlaw 15
Slide 17: Reflex Wave smart band
REFLEX WAW/ GESTURE CONTROL SMART BAND,
Slide 18: Titan ceramic watch
TITAN ® TITAN an CERAMIC Presenting the slimmest ceramic watch in the universe 17
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
Jewellery _ = | + IK TANISHQ HUM HAR SHAADI KE Liat TAYAAR HAIN! é 0 6 fee ny @ ® hint @Q, ub er er a 9 0} Nola ed el Ee | @ ¥ |) Corolone
Slide 21: Jewellery manufacturing facilities
Jewellery Karigar Center, Hosur • Pantnagar • Sikkim Manufacturing Facilities/ • Hosur Karigar Centers 20
Slide 22: Tanishq Stores
Tanishq Stores 277 showrooms of Tanishq (Net 24 added in 9M FY’19). 172 towns – 1.07 mn sq.ft. of Tanishq (Net 65k sq.ft. added in 9M FY‘19). 3 Zoya stores (~15K sq.ft.) 21
Slide 23: Mia Stores
Mia Stores 28 Standalone stores and 20 Shop-in-shops (~11k sq.ft.) 22
Slide 24: CaratLane Stores
Carat Lane Stores 50 showrooms across 18 towns (~34k sq.ft.) 23
Slide 25: Titan campaign
TITAN OMPANY c Na 1ec | adasiee |SaaetHe | 24
Slide 26: Own it. Flaunt it.
OWN IT. FLAUNT JIT Party Diamonds Starting at %30,000 2517DCZ
Slide 27: 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 28: Eye Wear Frames
Eye Wear In-house brands Frames Sunglasses Manufacturing Integrated Eyewear facility - Chikaballapur Lens Labs 27
Slide 29: Titan Eye Plus Stores
Titan Eye Plus Stores 525 showrooms (Net 25 additions in 9M FY ’19) 223 towns – 347k sq.ft. 28
Slide 30: Latest styles
Latest styles ab har budget ke liye! #GreatStylesGreatPrices * Styles so affordable, Lu you wont stop at one. #GreatStylesGreatPrices
Slide 31: Fastrack sunglasses
fastrack SUNGLASSES
Slide 32: 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 33: Skinn 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 34: 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 35: Our Stores
Our Stores 34
Slide 36: Titan Company Limited Q3 Performance
Titan Company Limited Q3 Performance 35
Slide 37: Q3 Performance - Standalone
Q3 Performance - Standalone Company • The Company continued the good growth momentum across all its businesses in the seasonally strong third quarter as well, demonstrating the inherent strength of virtually all the brands in its portfolio, and the strong connect with our consumers. • Revenue for th
Slide 38: Q3 Performance - Standalone: Jewellery
Q3 Performance - Standalone Jewellery • The Jewellery division had a good festive season and recorded strong revenue growth of 37%, on back of strong growth in both studded and plain jewellery category. • Plain category also benefitted from a large institutional order of ~INR 200 crores of gold coin
Slide 39: Q3 Performance - Standalone: Watches and Eye Wear
Q3 Performance - Standalone Watches • Strong revenue growth momentum continued for third consecutive quarter, with growth rate of 19% in Q3. • Broad based growth across channels. E-Commerce and LFS channels continues to witness the strongest growth rates. • Good progress in strengthening the smart p
Slide 40: Q3 Performance – Subsidiaries and JV
Q3 Performance – Subsidiaries and JV Titan Engineering and Automation Ltd (TEAL) - 100% owned Subsidiary • TEAL had an excellent quarter with the revenues growing by 64% YoY. • Both the segments, Aerospace and defence (A&D) and Automation solution business grew strongly • The improvement in capabili
Slide 41: Retail Growth – Q3'19 and 9M FY'19
Retail Growth – Q3‘19 and 9M FY’19 Q3’19 9M FY’19 Sales value Like-to-Like Sales value Like-to-Like growth growth growth growth Tanishq 34% 27% 22% 17% World of Titan 0% (2%) 3% 2% Fastrack 4% (1%) 6% 1% Helios 16% 6% 28% 7% LFS (for 20% 15% 23% 18% Watches) Titan Eye+ 23% 13% 19% 10% Note: 1. Above
Slide 42: Total Income: Performance – Q3'19 and 9M FY'19
Total Income: Performance – Q3’19 and 9M FY’19 Total Income (1) Q3'18 Q3'19 Growth % 9M FY'18 9M FY'19 Growth % (in INR Crores) Watches 539 641 19% 1,632 1,910 17% Jewellery 3,576 4,890 37% 9,744 12,044 24% Eyewear 93 129 40% 306 381 24% Others / Corporate (2) 35 73 105% 123 186 52% Standalone 4,243
Slide 43: EBIT Performance – Q3'19 and 9M FY'19
EBIT Performance – Q3’19 and 9M FY’19 EBIT (in INR Crores) (1) Q3'18 Q3'19 Growth % 9M FY'18 9M FY'19 Growth % Watches 83 54 -34% 233 287 24% Jewellery 385 651 69% 1,092 1,436 31% Eyewear (4) (1) 0 (1) Others/ Corporate (2) (29) (91) (60) (158) Standalone 434 612 41% 1,265 1,565 24% Caratlane (18) (
Slide 44: P&L – Q3'19 and 9M FY'19 – Standalone Company
P&L – Q3’19 and 9M FY’19 – Standalone Company in INR Crores Q3'18 Q3'19 YoY 9M FY'18 9M FY'19 YoY Revenue from operations 4,225 5,672 34% 11,739 14,398 23% Other Income 18 61 66 123 Total Income 4,243 5,733 35% 11,805 14,521 23% COGS 3,136 4,248 8,639 10,587 Gross Profit 1,107 1,486 34% 3,166 3,935
Slide 45: Capital Employed - Standalone
Capital Employed - Standalone in INR Crores Segment Assets Segment Liabilities Capital Employed 31-Mar-18 31-Dec-18 31-Mar-18 31-Dec-18 31-Mar-18 31-Dec-18 Watches 1,354 1,532 448 435 906 1,097 Jewellery 5,611 5,960 3,536 5,035 2,076 925 Eyewear 287 366 81 117 206 250 Others 52 99 19 27 33 72 Corpor
Slide 46: Quarterly Performance Trends: Company
Quarterly Performance Trends Company: Revenue 6,000 60% 5,000 50% 4,000 40% Rs Crores 30% 3,000 20% 2,000 10% 1,000 0% - -10% 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 Net sales 3,405 2398 2,770 2,620 3,867 3,538 4,027 3,488 4,225 3,917 4,319 4,407 5,
Slide 47: Quarterly Performance Trends: Watches
Quarterly Performance Trends Watches: Total Income 800 25.0% 700 20.0% 600 15.0% Rs Crores 500 10.0% 400 5.0% 300 0.0% 200 -5.0% 100 -10.0% 0 -15.0% 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 Net sales 484 449 500 524 508 503 517 576 539 494 594 676 64
Slide 48: Quarterly Performance Trends: Jewellery
Quarterly Performance Trends Jewellery: Total Income 6,000 70.0% 5,000 60.0% 4,000 50.0% Rs Crores 40.0% 3,000 30.0% 2,000 20.0% 1,000 10.0% 0 0.0% 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 Net sales 2,820 1847 2,151 1,988 3,255 2,913 3,381 2,788 3,57
Slide 49: Quarterly Performance Trends: Volume and Grammage Growth
Quarterly Performance Trends Watches: Volume growth 25% 20% 15% 10% Growth (%) 5% 0% -5% -10% -15% -20% -25% 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 Volume Growth 0% -19% 1% -9% 4% 10% 5% 9% 11% -1% 10% 21% 16% Jewellery: Gold price (22kt) and Gramm
Slide 50: 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 51: 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 52: Annual Performance Trends – Capital Employed, ROCE, ROE
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 53: Dividend
Dividend 10 year 350 CAGR: 23% 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 54: Market Capitalisation
Market Capitalisation 10 year CAGR: 27% Stock Performance Vs Sensex (last 6 months) 90,000 83,656 82,653 80,000 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 55: Awards and Recognitions won in 2018
Awards and Recognitions won in 2018 • Titan wins in Pitch Top 50 Brands, 2018, in the ‘Evergreens Category’. • Fastrack wins at the Afaqs Foxglove awards 2018 for ‘Shut the Fake up’ campaign. • Sonata wins the ‘Best Brand Launch of the Year’ at the ‘Brand Equity Marketing Awards’. • Tanishq received
Slide 56: Sustainability @ Titan
Sustainability @ Titan Formally defined CSR Policy in line with the company’s vision The CSR focus at Titan will continue 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. We wi
Slide 57: Thank You
Thank You 4 TITAN COMPANY