Tribhovandas Bhimji Zaveri Limited · NSE:TBZ

Tribhovandas Bhimji Zaveri — Q3 FY17 Earnings Presentation

31 slides from Tribhovandas Bhimji Zaveri's earnings presentation, February 2017

  1. Slide 1: Investor Presentation Q3 & 9M FY17 Results Update

    INVESTOR PRESENTATION Q3 & 9M FY17 RESULTS UPDATE February 2017

  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  Q3 & 9M FY17 Results Update  About Us  Operational Summary  Annexure

  4. Slide 4: Key Highlights

    KEY HIGHLIGHTS • Q3 FY17 Revenues grew by 10% YoY to ₹ 5,430 Mn Revenues • 9M FY17 Revenues declined by 3% YoY to ₹ 13,161 Mn • Q3 FY17 EBITDA grew by 12% YoY to ₹ 191 Mn EBITDA • 9M FY17 EBITDA grew by 59% YoY to ₹ 575 Mn • Q3 FY17 PAT grew by 89% YoY to ₹ 61 Mn PAT • 9M FY17 PAT grew by 310% YoY t

  5. Slide 5: Q3 FY17 Results Update

    Q3 FY17 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS 13.2% 12.7% 1.1% 3.5% 3.5% 0.7% 5,430 61 4,957 191 171 33 10 % 12 % 89 % Q3 FY16 Q3 FY17 Q3 FY16 Q3 FY17 Q3 FY16 Q3 FY17 Net Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) Q3 FY17 3.7% 2.3% 1.1% 2.0% Q3 FY16 3.2% 4.0% 1

  6. Slide 6: Q3 FY17 Results Update: Segment Analysis

    Q3 FY17 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS 9.5% 8.3% 28.3% 27.3% 3,800 4,116 1,188 1,036 8% 15 % Q3 FY16 Q3 FY17 Q3 FY16 Q3 FY17 Gold Sales Gold GM Diamond Sales Diamond GM AVERAGE TICKET PRICE Q3 FY17 Gold Diamond % of Sales – Q3 FY17 75.8% 21.9% 135,356 126,261 87,663 % of Sales – Q3 FY16 76

  7. Slide 7: 9M FY17 Results Update

    9M FY17 RESULTS UPDATE In Rs Mn PROFIT ANALYSIS * 13.5% 14.6% 4.4% 1.0% 2.7% 13,496 13,161 575 129 -0.5% 310 % 362 3% 59 % -61 9M FY16 9M FY17 9M FY16 9M FY17 9M FY16 9M FY17 Net Sales Gross Margin EBITDA EBITDA Margin PAT PAT Margin OPERATING PARAMETERS (%) * 9M FY17 4.1% 2.4% 1.3% 2.5% 9M FY16 3.6

  8. Slide 8: 9M FY17 Results Update: Segment Analysis

    9M FY17 RESULTS UPDATE In Rs Mn SEGMENT ANALYSIS * 11.1% 29.6% 28.1% 9.3% 10,356 9,609 2,786 2,947 7% 6% 9M FY16 9M FY17 9M FY16 9M FY17 Gold Sales Gold GM Diamond Sales Diamond GM AVERAGE TICKET PRICE 9M FY17 * Gold Diamond % of Sales – 9M FY17 73.0% 22.4% 131,306 132,295 82,686 91,129 % of Sales –

  9. Slide 9: Balance Sheet Update

    BALANCE SHEET UPDATE INVENTORY BREAKUP (%) 6.8% 7.9% 38.6% 38.7% 51.4% 56.2% 54.6% 53.4% 48.6% 43.8% Mar-16 Dec-16 Mar-16 Dec-16 Gold Diamond Others Own Gold Gold on Loan LEVERAGE (RS MN) 1.4 1.5 1.4 1.2 1.1 6,121 6,462 6,405 5,482 4,616 4,424 4,449 4,492 4,553 5,031 Dec-15 Mar-16 Jun-16 Sep-16 Dec-

  10. Slide 10: Key Result Takeaways

    KEY RESULT TAKEAWAYS REVENUES:  Q3 FY17 revenues increased by 10% YoY –  Jewellery demand was robust in October driven by healthy festive demand. The withdrawal of high denomination notes impacted jewellery sales in November, however the situation gradually improved in December.  Contribution to

  11. Slide 11: Results Update – December 2016

    RESULTS UPDATE – DECEMBER 2016 PARTICULARS (IN MN) Q3 FY17 Q3 FY16 YoY % Q2 FY17 QoQ % 9M FY17 * 9M FY16 YoY % (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Net Revenues 5,430 4,957 9.5% 4,470 21.5% 13,161 13,496 -2.5% COGS 4,743 4,304 10.2% 3,813 24.4% 11,234 11,674 -3.8% Gross Profit 687 653 5.3% 658

  12. Slide 12: Results Update – December 2016

    RESULTS UPDATE – DECEMBER 2016 PARTICULARS (IN MN) DEC-16 SEP-16 JUNE-16 MAR-16 DEC-15 (QUARTERLY UNAUDITED) (₹) (₹) (₹) (₹) (₹) Shareholders Funds 4,553 4,492 4,449 4,424 4,617 Loan Funds 5,341 6,731 6,704 6,505 5,882 Other Long Term Liabilities 98 102 95 90 30 Sources of Funds 9,992 11,326 11,249

  13. Slide 13: Discussion Summary

    DISCUSSION SUMMARY  Q3 & 9M 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 – DEC 2016 PUBLIC, 23.0% DII, 0.1% FII, 2.8% 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 ~1,01,050 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) 101,050 91,058 98,200 82,368 88,093 ₹ 301 ₹ 255 ₹ 214 ₹ 216 47,796 ₹ 175 * # * ₹ 163 27 28 30 31 25 14 FY12 FY13 FY14 FY15 FY16 9M FY17 Carpet Area No. of Retail Outlets Revenue/average sqft (₹ '000/sq ft) • Averag

  19. Slide 19: Discussion Summary

    DISCUSSION SUMMARY  Q3 & 9M 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 MARGIN

  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 & CONVERSION 1

  22. Slide 22: Thank You

    THANKYOU Saurav Banerjee, CFO Nilesh Dalvi Tribhovandas Bhimji Zaveri Limited Dickenson Seagull IR +91 022 30735000 +91 9819289131 saurav.banerjee@tbzoriginal.com nilesh.dalvi@dickensonir.com

  23. Slide 23: Annexure

    ANNEXURE

  24. Slide 24: Awards & Recognition

    AWARDS & RECOGNITION  “BEST RING DESIGN OVER Rs. 2,50,000” JJS-IJ Jewellers Choice Design Awards - 2016  “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–

  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

    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

    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

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