Slide 1: KDDL Limited / ETHOS Limited Investor Presentation
KDDL Limited ETHOS Limited Investor Presentation - November 2015
Slide 2: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which has been prepared by KDDL Limited (the “Company”), solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the b
Slide 3: Business Overview
Business Overview Scalable Stable Retail Business - Manufacturing Business ETHOS India’s Largest Retail Chain of Leading supplier of premium Luxury Watch Studios watch components - watch dials and watch hands 71% Authorized retailer of over 60 29% luxury watch brands, ranging Caters to deman
Slide 4: Led by Experienced Team
Led by Experienced Team Mr. Sanjeev Masown – CFO, KDDL With more than 24 yrs of experience across industries Mr. Dinesh Agrawal – COO, KDDL Mechanical Engineer with more than 39 yrs of experience Mr. Yashovardhan Saboo Chief Executive Officer Mr. Gregor Fiala – CMO, KDDL With Experience of 21 years
Slide 5: ETHOS Vision
ETHOS Ltd Vision “To be the biggest and finest retailer of premium watches in India with exemplary ethical and customer service standards” 5
Slide 6: What differentiates ETHOS from the rest?
What differentiates ETHOS from the rest? Creating India’s Largest Retail Chain of Luxury & Premium Watches 6
Slide 7: TRUST
TRUST Authorized Retailer to more than 60 premium & luxury brands Associates with brands that have an “All-official” policy Ethos hosted India’s first Grand Prix d’Horlogerie De Genève 7
Slide 8: Complete range of luxury and premium watches
Complete range of luxury and premium watches L U X U R y P R E S T I G E 8
Slide 9: Pan-India Presence with Offline Store Network
Pan-India Presence with Offline Store Network... India’s Largest retail chain of Luxury Watches Amritsar Ludhiana Presence across Metros, Tier I, Tier II Chandigarh cities New Delhi Gurgaon 3 Duty Paid Retail Outlets at Bhopal Domestic Terminals Ahmedabad Vadodara Surat Nagpur 3 Duty Free Retail Out
Slide 10: Complemented by Online Presence
Complemented by Online Presence Google Search Engine Ads targeted to users on Social media based on life-events www.ethoswatches.com Browse online catalogue of finest watch collections of Luxury & Premium Watch Brands Catalogue of over 60 Click on “Click on Selling Price” – creating a “LEAD” brands
Slide 11: Omni-Channel Presence
Omni – Channel Presence Online Presence Offline Presence Established online presence Developed largest retail with launch of web portal chain for Luxury watches www.ethoswatches.com in April 2012 Pan-India network with 41 stores across 15 cities Amongst World’s most visited websites of autho
Slide 12: Exemplary Service
Exemplary Service Pre-Sales Services Post-Sales Services In-depth knowledge of watch In-house repair and service and brands facility Authorized service centre for Front-end staff trained by 15 of the world’s top luxury company and brands on watch brands product nuances Only retailer in Ind
Slide 13: Supported by Unique Store Formats
...Supported by Unique Store Formats 8 Stores 6 Stores 27 Stores 13
Slide 14: To cater to different segments & customers
... To cater to different segments & customers ETHOS Summit ETHOS at Malls Showcases brands in Luxury Segment ETHOS at Airports Showcases brands in Prestige 1st Luxury Watch Retailer to segment Price ranging from Rs. 2 Lakh & open store at Airport in 2009 above Price ranging from Rs. 5,000
Slide 15: Evolving Business with…
Evolving Business with… FY15 : Revenue - Rs. 280 Crs Revenue Rs. 127 2012 Created online lead generating platform Revenue Rs. 89 Crs 2011 Achieved Full Break-even Revenue Rs.45 Crs 2009 First luxury watch retailer to open store at Airport Revenue Rs. 30 Crs 2008 Launched “SUMMIT” Format for
Slide 16: Strategy to Improving Returns
…Strategy to Improving Returns Focus on Expand Reduce Front- Online catchment End Cost like Presence area of offline Manpower and store, leading Rental Rationalize to higher expenses Store Presence revenue Improve Return On Capital Employed Operating Minimize Maximize Leverage Investment Reach Playi
Slide 17: Minimize Investments…
Minimize Investments… Rationalized Store Growth Since FY13 Focus on Online Presence 45 46 Investing in requisite IT infrastructure 36 37 Building team of Watch specialist to 25 service leads generated Implementing efficient logistics for fulfillment FY11 FY12 FY13 FY14 FY15 17
Slide 18: While Maximizing Reach
… While Maximizing Reach Visitors on Website (# in Millions) Club Echo – Member Base (#) 6 3 1 91,705 FY13 FY14 FY15 66,962 Leads Generated & transferred to stores (#) 50,517 1,32,483 96,162 33,331 21,221 30,032 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Online presence augmenting catchment area of off
Slide 19: Operating Leverage Playing Out
Operating Leverage Playing Out Increasing Online Revenue... ... Improved Absorption of Fixed Expenses Rs. Crs 10.0% 68 9.6% 9.6% 18.0% 9.5% 9.2% 36 8.9% 8.8% 9.0% 17 16.0% 8.5% 17.9% 17.9% 17.1% 17.3% 213 8.0% 184 14.0% 16.1% 157 127 7.5% 90 12.0% 7.0% FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY
Slide 20: Watch Component Manufacturing
Watch Component Manufacturing Stable Business
Slide 21: Journey So Far
Journey So Far Precision Engineering Started in 2003 Ventured into Precision Watch Hands Engineering in 2003 Manufacturing Set-up in Bengaluru in 1998 Began production of Watch Hands Watch Dial Set-up plant in Manufacturing Bengaluru in 1983 Set-up 2nd plant in Set-up plant at Parwanoo,
Slide 22: Watch Hands
Watch Hands • Leading Global supplier of High Precision Hands for watches • Only supplier in India and one of 5 independent manufacturers globally • Manufacturing facilities located at Bengaluru, annual Capacity of 47 million pieces • Capability to manufacture Hands with strict dimensional control •
Slide 23: Watch Dials
Watch Dials • Leading Global supplier of Premium Watch Dials • More than 30 years of experience in Dial manufacturing • Manufacturing facilities located at Parwanoo & Derabasi near Chandigarh • Annual Capacity of 4.5 million dials • Acquired manufacturing uit in Switzerland in 2007, Pylania SA • Cap
Slide 24: Precision Engineering
Precision Engineering • Engaged in manufacturing of High Precision Stamping Parts & Precision Progressive Tools • Manufacturing Plant at Bangalore, Karnataka • Offers total solution for production of Stamp Parts • Product Concept to mass production meeting quality demand of consistency & accuracy in
Slide 25: Stable Performance over years
Stable Performance over years Revenue (Rs.Crs) EBITDA (Rs.Crs) CAGR + 15% CAGR + 44% 127 30 23% 19% 111 6 20% 96 6 21 25 18% 16 9 20 13% 16 13% 52 45 15 34 25 8% 10 21 44 48 12 3% 37 5 - -2% FY13 FY14 FY15 FY13 FY14 FY15 Watch Dials Watch Hands Precision Engineering Others 25
Slide 26: Quarterly Financial Highlights
Quarterly Financial Highlights
Slide 27: Continue to Grow Sustainably - H1 FY16 Consolidated
Continue to Grow Sustainably - H1 FY16 Consolidated 15% Revenue 4% EBITDA Rs. 211 Crs Rs.17 Crs 22% PAT after MI 1.9x PAT after MI Margin 38% Cash PAT Rs. 7 Crs 3.2% Rs. 12 Crs 27
Slide 28: Performance Highlights - H1 FY16 Ethos
Performance Highlights - H1 FY16 Ethos 26% Revenue 18% 28% Same Store Revenue from Online Rs. 148 Crs Billing Growth Lead Generation 41% 43 bps 77% EBITDA EBITDA Margin Cash PAT Rs. 6 Crs 4.0% Rs. 2 Crs 28
Slide 29: Strong Performance by Ethos in an Off-Season
Strong Performance by Ethos in an “Off-Season” Revenue (Rs. Crs) PAT (Rs. Crs) Cash PAT (Rs. Crs) H2 163 (58%) 148 H2 3.1 H2 5 (131%) (82%) 2 0.1 H1 118 (42%) H1 -0.7 H1 1 (-31%) (18%) FY15 FY16 FY15 FY16 FY15 FY16 29
Slide 30: Improving Returns
Improving Returns Growing Revenue (Rs.Crs) Reducing Front-end Rent & Manpower Cost as % of Revenue +26% 15.4% 148 15.0% -90 bps 118 13.5% 12.6% 92 72 H1 FY13 H1 FY14 H1 FY15 H1 FY16 H1 FY13 H1 FY14 H1 FY15 H1 FY16 Improving EBITDA (Rs.Crs) Improving EBITDA Margin (%) +41% +43 bps 6.0 4.0% 3.5% 3.6%
Slide 31: With Growing Online Sales
... With Growing Online Sales Online Billing (Rs. Crs) Online – as % of Ethos Revenue +56% +560 bps 47 28% 23% 30 15% 16 8% 6 H1 FY13 H1 FY14 H1 FY15 H1 FY16 H1 FY13 H1 FY14 H1 FY15 H1 FY16 Visitors on website (‘000) +37% 3,527 2,575 1,314 413 H1 FY13 H1 FY14 H1 FY15 H1 FY16 31
Slide 32: Focus towards Investing in Advertising
... & Focus towards Investing in Advertising... … with ETHOS co-branding 32
Slide 33: Trust Campaign across channels
TRUST CAMPAIGN across channels... … to Educate consumers about Watches … to Create Awareness about unscrupulous activities … To Reinforce our “ETHOS” 33
Slide 34: Consolidated – Profit & Loss Statement
Consolidated – Profit & Loss Statement Rs.Crs Q2 FY16 Q2 FY15 YoY % H1 FY16 H1 FY15 YoY% FY15 Revenue 110 98 12% 211 183 15% 412 Cost of Goods Sold 66 54 123 102 240 Employee Expenses 16 15 31 28 58 Other Expenses 19 19 39 37 75 EBITDA 9.6 11.1 (13%) 17.4 16.7 4% 39.0 EBITDA Margin 8.7% 11.2% 8.3% 9
Slide 35: Consolidated – Balance Sheet
Consolidated – Balance Sheet Rs. Crs Sep-15 Mar-15 Shareholder’s Fund Share capital 10 9 Reserves & Surplus 79 42 Minority Interest 32 25 Non-current liabilities Long term borrowings 30 36 Deferred Tax Liabilities 2 3 Long Term Provisions 6 5 Current liabilities Short term borrowings 62 71 Trade Pay
Slide 36: Profit & Loss Statement - Ethos
Profit & Loss Statement - Ethos Rs.Crs Q2 FY16 Q2 FY15 YoY % H1 FY16 H1 FY15 YoY% FY15 Revenue 79 63 25% 148 118 26% 281 Cost of Goods Sold 59 46 110 87 209 Employee Expenses 5 4 10 8 17 Other Expenses 11 10 23 20 41 EBITDA 4.0 3.6 10% 6.0 4.2 41% 14.3 EBITDA Margin 5.0% 5.7% 4.0% 3.6% 5.1% Other In
Slide 37: Ethos – Balance Sheet
Ethos – Balance Sheet Rs. Crs Sep-15 Mar-15 Shareholder’s Fund Share capital 31 31 Reserves & Surplus 24 20 Non-current liabilities Long term borrowings 8 8 Long Term Provisions 1 1 Current liabilities Short term borrowings 49 46 Trade Payables 71 70 Other current liabilities 24 12 Total Liabilities
Slide 38: Historical Financial Highlights
Historical Financial Highlights
Slide 39: Ethos – Profit & Loss Statement
Ethos – Profit & Loss Statement Rs.Crs FY15 FY14 FY13 FY12 FY11 Revenue 281 220 174 127 90 Cost of Goods Sold 209 162 127 92 66 Employee Expenses 17 14 11 8 5 Other Expenses 41 36 28 21 14 EBITDA 14 9 8 6 5 EBITDA Margin 5.1% 4.1% 4.5% 5.1% 5.9% Other Income 0 0 0 0 1 Interest & Finance Charges 7 6
Slide 40: Ethos – Balance Sheet
Ethos – Balance Sheet Rs. Crs Mar-15 Mar-14 Mar-13 Mar-12 Mar-11 Shareholder’s Fund Share capital 31 24 24 12 10 Reserves & Surplus 20 18 16 15 11 Non-current liabilities Long term borrowings 8 10 8 7 4 Long Term Provisions 1 1 0 0 1 Current liabilities Short term borrowings 46 32 30 32 28 Trade Pay
Slide 41: Consolidated – Profit & Loss Statement
Consolidated – Profit & Loss Statement Rs.Crs FY15 FY14 YoY % Revenue 412 335 23% Cost of Goods Sold 240 190 Employee Expenses 58 50 Other Expenses 75 65 EBITDA 39 30 30% EBITDA Margin 9.5% 9.0% Other Income 2 3 Interest & Finance Charges 14 14 Depreciation 12 8 PBT 14 11 Tax 5 2 PAT After MI 9 9 3%
Slide 42: Consolidated – Balance Sheet
Consolidated – Balance Sheet Rs. Crs Mar-15 Mar-14 Shareholder’s Fund Share capital 9 9 Reserves & Surplus 42 39 Minority Interest 25 18 Non-current liabilities Long term borrowings 36 41 Deferred Tax Liabilities 3 4 Long Term Provisions 5 5 Current liabilities Short term borrowings 71 57 Trade Paya
Slide 43: Dividend History
Dividend History Dividend Per Share (Rs.) 2.0 1.5 1.0 FY13 FY14 FY15 Maintained Dividend Payout Ratio of 28% in last 2 years 43
Slide 44: Contact
Contact For further information, please contact: Company : Investor Relations Advisors : KDDL Limited Strategic Growth Advisors Pvt. Ltd. CIN : L33302HP1981PLC008123 CIN : U74140MH2010PTC204285 Mr. C. Raja Sekhar Ms. Sanjita Ghosh / Mr. Shogun Jain +91 7738358389 / +91 7738377756 rajasekhar@ethoswat