Tribhovandas Bhimji Zaveri Limited · NSE:TBZ

Tribhovandas Bhimji Zaveri — H1 FY2017 Earnings Presentation

31 slides from Tribhovandas Bhimji Zaveri's earnings presentation, November 2016

  1. Slide 1: Investor Presentation Q2 & H1 FY17 Results Update

    INVESTOR PRESENTATION Q2 & H1 FY17 RESULTS UPDATE November, 2016

  2. 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

  3. Slide 3: Discussion Summary

    DISCUSSION SUMMARY  Q2 & H1 FY17 Results Update  About Us  Operational Summary  Annexure

  4. Slide 4: Business Scenario

    BUSINESS SCENARIO  Gradual improvement in consumer sentiments was witnessed during Q2 FY17  Macro-economic tailwinds in form of robust economic condition and revival in rural demand due to good monsoon, led to pickup in discretionary spending.  The average gold price during Q2 FY17 was up ~20.4%

  5. Slide 5: Key Result Takeaways

    KEY RESULT TAKEAWAYS REVENUES:  Q2 FY17 revenues increased by 2.1% YoY -  Jewellery demand was driven by positive consumer sentiments.  Tactical activations led to higher sales.  The new Kalpavruksha Scheme generated sales of ₹ 168 mn in Q2 FY17. MARGINS:  Q2 FY17 blended gross margin increased

  6. Slide 6: Q2 FY17 Results Update

    Q2 FY17 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS 14.7% 1.0% 12.0% 4.5% 43 4,380 4,470 202 -121 -2.8% -9 Q2 FY16 Q2 FY17 Q2 FY16 Q2 FY17 -0.2% Net Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) Q2 FY17 4.0% 2.3% 1.3% 2.5% Q2 FY16 4.0% 2.1% 1.4% 2.6% 2.1% Salaries Adver

  7. Slide 7: Q2 FY17 Results Update: Segment Analysis

    Q2 FY17 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS 29.3% 27.6% 12.0% 7.2% 3,441 3,127 879 982 Q2 FY16 Q2 FY17 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE Q2 FY17 Gold Diamond % of Sales – Q2 FY17 70.0% 22.0% 1,27,923 1,37,577 % of Sales – Q2 FY16 78.6% 20.1% 1,03,911 84,858 Sales

  8. Slide 8: H1 FY17 Results Update

    H1 FY17 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS * # 16.0% 5.0% 0.9% 13.7% 68 383 2.2% 8,540 7,731 191 -94 -1.1% H1 FY16 H1 FY17 H1 FY16 H1 FY17 H1 FY16 H1 FY17 Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) H1 FY17 4.4% 2.4% 1.5% 2.7% H1 FY16 3.9% 2.9% 1.5% 2.5% 0.7%

  9. Slide 9: H1 FY17 Results Update: Segment Analysis

    H1 FY17 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS 30.9% 27.9% 13.2% 9.2% 6,555 5,493 1,750 1,759 H1 FY16 H1 FY17 Gold Sales Diamond Sales Gold GM Diamond GM AVERAGE TICKET PRICE H1 FY17 Gold Diamond % of Sales – H1 FY17 71.1% 22.8% 1,29,105 1,36,780 93,926 % of Sales – H1 FY16 76.8% 20.5% 84,450 Sale

  10. Slide 10: Balance Sheet Update

    BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 6.8% 7.3% 38.6% 37.3% 51.5% 54.5% 54.6% 55.4% 48.6% 45.5% Mar-16 Sep-16 Mar-16 Sep-16 Gold Diamond Others Own Gold Gold on Loan LEVERAGE (RS MN) 1.4 1.4 1.5 1.4 1.2 6,222 6,121 6,462 6,405 5,482 4,572 4,616 4,424 4,449 4,492 Sep-15 Dec-15 Mar-16 Jun-16 Sep-

  11. Slide 11: Results Update – September 2016

    RESULTS UPDATE – SEPTEMBER 2016 PARTICULARS (IN MN) Q2 FY17 Q2 FY16 YoY % Q1 FY17* QoQ % H1FY17 * H1FY16 YoY % (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Net Revenues 4,470 4,380 2.1% 3,260 37.1% 7,731 8,540 -9.5% COGS 3,813 3,855 -1.1% 2,679 42.3% 6,492 7,370 -11.9% Gross Profit 658 525 25.2% 581 13

  12. Slide 12: Results Update – September 2016

    RESULTS UPDATE – SEPTEMBER 2016 PARTICULARS (IN MN) SEP-16 JUNE-16 MAR-16 DEC-15 SEP-15 (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Shareholders Funds 4,492 4,449 4,424 4,617 4,572 Loan Funds 6,731 6,704 6,505 5,882 6,525 Other Long Term Liabilities 102 95 90 30 28 Sources of Funds 11,326 11,249 11,01

  13. Slide 13: Discussion Summary

    DISCUSSION SUMMARY  Q2 &H1 FY17 Results Update  About Us  Operational Summary  Annexure

  14. Slide 14: 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

  15. Slide 15: 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 Second Franchise opened in Zaveri pre-hallmarked expansion - ~6k crosses 84k sq ft Store and 31st TBZ Bazaar, Mumbai jewellery to ~24k sq ft across 20 cities sto

  16. Slide 16: About Us: Shareholding Structure

    ABOUT US: SHAREHOLDING STRUCTURE SHAREHOLDING PATTERN – SEP 2016 PUBLIC, 22.5% DII, 0.1% FII, 3.3% PROMOTER, 74.1% 16

  17. Slide 17: About Us: Retail Presence

    ABOUT US: RETAIL PRESENCE Present across 24 cities PAN-INDIA PRESENCE WITH 31 STORES in 11 states WITH A RETAIL SPACE OF ~1,01,500 SQ. FT. SPREAD ACROSS 24 CITIES IN 11 STATES. NUMBER OF STORES TILL DATE Large Format 25 Small Format 6 Tier I 18 Tier II 5 Patna Metros 8 Total Stores 31 Total Area ~1,

  18. Slide 18: About Us: Retail Footprint Expansion

    ABOUT US: RETAIL FOOTPRINT EXPANSION HIGH SALES PRODUCTIVITY (REVENUE / YEAR / SQ FT) 1,01,050 91,058 98,200 82,368 88,093 ₹ 301 ₹ 255 ₹ 214 ₹ 216 47,796 ₹ 175 * # ₹ 162 * 30 31 25 27 28 14 FY12 FY13 FY14 FY15 FY16 H1 FY17 Carpet Area No. of Retail Outlets Revenue/average sqft (₹ '000/sq ft) • Avera

  19. Slide 19: Discussion Summary

    DISCUSSION SUMMARY  Q2 & H1 FY17 Results Update  About Us  Operational Summary  Annexure

  20. Slide 20: 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

  21. Slide 21: 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

  22. Slide 22: 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

  23. Slide 23: Annexure

    ANNEXURE

  24. Slide 24: Awards & Recognition

    AWARDS & RECOGNITION  “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– 2016 ” JJS-IJ Jewellers’ Choice Design Award - 2016  “ASIA’S MOST POPULAR BRANDS –

  25. 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

  26. 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 

  27. 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

  28. Slide 28: 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

  29. Slide 29: 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%

  30. Slide 30: Business Model: Scalability

    BUSINESS MODEL: SCALABILITY  TBZ has an expansion plan to increase its retail space from ~1,01,050 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 prosp

  31. 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

Tribhovandas Bhimji Zaveri — H1 FY2017 Earnings Presentation on 6ix