Tribhovandas Bhimji Zaveri Limited has informed the Exchange regarding Investor Presentation- Investors / Analysts�� Presentation {Disclosure of Material Event/ Information under Regulation 30 of SEBI...
Date: 8th February, 2019
To , The Manager, Compliance Department, National Stock Exchange of India Limited Exchange Plaza , Plot No . C/1 , G Block , Band ra-Kurla Complex, Bandra (East), Mumbai - 400 051.
To , The Manager, Compliance Department, SSE Limited Corporate Serv ice Department, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 00 1.
Dear Sir / Madam ,
Re: Sub:
Tribhovandas Bhimji Zaveri Limited. Script Code & 10: 534369 I TBZ Investors I Analysts' Presentation {Disclosure of Material Event! Information under Regulation 30 of SEBI (Listing Obligations and Disclosure ReqUirements) Regulations, 2015}
the Securities and Exchange Board of
Further to our letter dated 1st February, 2019 on the Confe rence Call , and pursuant to Regulation 30(6) of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 , a copy of the Earnings Presentation that we propose to make during the Conference Call for analyst and investors scheduled to be held on Friday , 8th February, 2019 at 5.00 p.m. (1ST) is enclosed and the said Earnings Presentation has also been uploaded on the Company's Website at www.tbztheoriginal.com .
We request you to kindly take the same on record.
Thanking You .
Yours faithfully, For Tribhovandas Bhimji Zaveri Limited
~
Niraj Oza Head - Legal & Company Secretary
Encl: as above
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INVESTOR PRESENTATION Q3 & 9M FY19 RESULTS FEBRUARY 2019
DISCLAIMER
This presentation has been prepared by Tribhovandas Bhimji Zaveri Limited (“TBZ”) for informational invitation or recommendation to purposes only and does not constitute or form any part of any offer, purchase or subscribe for any securities in any jurisdiction, and no part of it shall form the basis of, or be relied upon in connection with, any contract or commitment on the part of any person to proceed with any transaction.
The information contained in this presentation has not been independently verified. No representation or warranty, express or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials.
Any forward-looking statements in this presentation are subject to risks and uncertainties that could cause actual results to differ materially from those that may be inferred to being expressed in, or implied by, such statements. Such forward-looking statements are not indicative or guarantees of future performance. Any forward-looking statements, projections and industry data made by third parties included in this presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
This presentation may not be all inclusive and may not contain all of the information that you may consider material. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. Neither the Company nor any of its affiliates, advisers or representatives accepts liability whatsoever for any loss howsoever arising from any information presented or contained in these materials. This presentation cannot be used, reproduced, copied, distributed, shared or disseminated in any manner. No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of TBZ.
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DISCUSSION SUMMARY
• Q3 & 9M FY19 Results Update
• About Us
• Operational Summary
•
Business Model
Q3 FY19 RESULT HIGHLIGHTS
REVENUES & GROSS MARGIN
EBITDA & EBITDA MARGIN
PAT & PAT MARGIN
13.5%
5,476
13.9%
5,917
4.1%
226
5.1%
301
1.3%
74
1.9%
111
In Rs Mn
Q3 FY18
Q3 FY19
Q3 FY18
Q3 FY19
Q3 FY18
Q3 FY19
OPERATING COSTS (%)
REVENUE ANALYSIS
Q3 FY19
Q3 FY18
3.5%
2.4%
1.3%
1.6%
3.5%
3.0%
1.2%
1.8%
Salaries
Advertisment
Rentals
Other Overheads
Total Revenue Growth % - Q3 FY19
Same Store Sales Growth % - Q3 FY19
8.1%
7.0%
Share of Diamond Jewellery - Q3 FY19 (Q3 FY18)
23.4% (22.1%)
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9M FY19 RESULT HIGHLIGHTS
REVENUES * & GROSS MARGIN
EBITDA & EBITDA MARGIN
PAT & PAT MARGIN
14.4%
13,178
14.6%
13,483
4.1%
541
4.4%
598
1.1%
140
1.0%
141
In Rs Mn
9M FY18
9M FY19
9M FY18
9M FY19
9M FY18
9M FY19
* Net of Excise Duty
OPERATING COSTS (%)
REVENUE ANALYSIS
9M FY19
9M FY18
4.1%
2.5%
1.6%
2.0%
4.2%
2.6%
1.4%
2.1%
Salaries
Advertisment
Rentals
Other Overheads
Total Revenue Growth % - 9M FY19
Same Store Sales Growth % - 9M FY19
2.3%
1.8%
Share of Diamond Jewellery - 9M FY19 (9M FY18)
22.8% (24.2%)
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Q3 FY19 BALANCE SHEET UPDATE
LEVERAGE ANALYSIS (RS MN)
1.09
1.16
4,867
5,313
5,726
4,931
Mar-18
Dec-18
Equity
Net Debt
Net Debt/Equity
GOLD INVENTORY BREAKUP (%)
TOTAL DEBT BREAKUP (RS MN)
60.7%
39.3%
Mar-18
59.6%
40.4%
Dec-18
Own Gold
Gold on Loan
5,687
2,784
2,903
Mar-18
6,129
2,957
3,172
Dec-18
Working Capital Debt
Gold on Loan
Note: Gold on Loan is shown as part of short term borrowings, while some of the listed peers show it under current liabilities / trade payables
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Q3 FY19 - KEY RESULT TAKEAWAYS
REVENUES:
• Revenues increased by 8.1% YoY
• Led by 7.0% same store sales growth
• Healthy consumer sentiments during festivals and wedding
season
MARGINS:
• Gross margin improved YoY from 13.5% to 13.9% in Q3 FY19 driven
by improved gold and diamond mix
• EBITDA increased by 33.3% YoY and EBITDA margin increased from 4.1% to 5.1%, led by growth in sales and strict control on operating costs
BALANCE SHEET:
•
•
•
•
Inventory increased during the quarter due to build-up ahead of new store opening in Bengaluru in January 2019
Total Debt grew from Rs 5,687 Mn in Mar-18 to Rs 6,129 Mn in Dec-18, inline with the increase in inventory
Finance Cost increased inline with incremental debt. The average cost of debt was 7.6%
Three new stores opened – one in Pune, Maharashtra in October 2018, second in Ludhiana, Punjab in November 2018 and third in Bengaluru, Karnataka in January 2019.
• Our total store count has reached to 41 stores with a retail area of
~120,699 sq. ft. spread across 29 cities in 14 states
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Q3 & 9M FY19 - PROFIT & LOSS STATEMENT
Particulars (In Rs Mn) – Standalone
Q3 FY19
Q3 FY18
YoY %
9M FY19
9M FY18
YoY %
FY18
Net Revenues
5,917
5,476
8.1%
13,483
13,178
2.3%
17,514
COGS
Gross Profit
5,098
4,735
7.7%
11,520
11,279
2.1%
15,053
820
741
10.6%
1,963
1,899
3.4%
Gross Margin (%)
13.9%
13.5%
31 bps
14.6%
14.4%
15 bps
Personnel Expenses
Other Expenses
EBITDA
204
314
301
188
327
226
8.5%
-4.0%
33.3%
547
818
598
553
805
541
-1.1%
1.7%
10.5%
731
2,461
14.1%
730
1,000
EBITDA Margin (%)
5.1%
4.1%
96 bps
4.4%
4.1%
33 bps
4.2%
Depreciation
Other Income
Interest Expenses
Profit Before Tax
Tax
PAT
27
14
118
170
59
111
22
8
97
115
41
74
20.8%
79.8%
22.1%
48.2%
43.9%
50.6%
71
32
342
216
75
141
PAT Margin (%)
1.9%
1.3%
53 bps
1.0%
64
39
299
218
78
140
1.1%
11.2%
-18.5%
14.6%
-0.7%
-3.4%
0.9%
85
70
397
319
108
211
-1 bps
1.2%
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Q3 & 9M FY19 - BALANCE SHEET
Particulars (In Rs Mn) – Standalone
December-18
September-18
June-18
March-18
December-17
Shareholders Funds
Loan Funds
Gold on Loan
Working Capital Loan
Other Long Term Liabilities
Sources of Funds
Net Block
Other Long Term Assets
Inventory
Debtors
Cash and Bank Balance
Other Current Assets
Current Liabilities
Net Current Assets
Application of Funds
4,931
6,129
2,957
3,172
97
11,157
1,101
184
11,880
267
403
475
3,153
9,872
11,157
4,823
6,292
2,933
3,359
76
11,191
1,024
252
11,558
221
328
401
2,593
9,915
11,191
4,879
6,082
2,975
3,107
70
11,031
994
268
10,765
111
415
170
1,692
9,769
11,031
4,867
5,687
2,784
2,903
62
10,615
1,001
258
10,218
230
374
116
1,581
9,357
10,615
4,803
5,283
2,595
2,688
73
10,159
1,022
251
10,377
209
436
125
2,261
8,886
10,159
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DISCUSSION SUMMARY
• Q3 & 9M FY19 Results Update
• About Us
• Operational Summary
•
Business Model
WHY IS TBZ DIFFERENT ?
Pedigree
Strong Brand Value
•
•
•
150+ years in jewellery business
First jeweller to offer buyback guarantee in 1938
Professional organisation spearheaded by 5th generation of the family
•
•
•
Healthy sales productivity
High footfalls conversion - 80%
High ticket size - Gold – Rs 91 k, Diamond - Rs 129 k
Scalability & Reach
•
41 stores (120,699 sq. ft.)
Presence - 29 cities, 14 states
• Expansion Plan -
•
~150,000 sq. ft. (75% of expansion through franchise route)
TBZ
SUSTAINABLE COMPETITVE ADVANTAGES
Specialty Wedding Jeweller
•
•
•
~ 65% of sales are wedding & wedding related purchases
Compulsion buying
Stable fixed budget purchases by customers
Design Exclusivity
• • •
• •
35 designers (incl. 16 CAD) 8 - 10 new jewellery lines/year In-house diamond jewellery production Customer loyalty Premium pricing
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KEY MILESTONES
STRONG LEGACY OF MORE THAN 150 YEARS BUILT ON TRUST
Flagship store opened in Zaveri Bazaar, Mumbai
Introduced 100% pre-hallmarked jewellery
Diamond facility expansion - ~6k to ~24k sq ft
First to launch light weight jewellery
Turnover crossed Rs 5,000 mn in FY09
Retail footprint crosses 84k sq ft across 20 cities
Sales crossed Rs 16,000 mn, PAT of Rs 850 mn
1st Franchise store opened at Dhanbad, Jharkhand in Nov-15
2nd Franchise store opened at Patna, Bihar in Aug-16
Opened 41st store in Bengaluru in Jan-19
1864
1938
1995
2001
2004
2009
2011
2012
2013
2014
2015
2016
2017
2019
First to offer buyback guarantee
Listed on BSE & NSE with IPO of Rs 2,000 mn
Mr Shrikant Zaveri took over the business
Implementation of Oracle ERP Suite
Recommended special dividend of 7.5% on the special occasion of 150th year of the company
3 franchise stores opened in Ranchi, Jharkhand in Mar-17, Jamnagar, Gujarat in Apr-17, and Bhopal, Madhya Pradesh in Oct-17
3 exclusive brand outlets opened in Malls – R-City, Seawoods in Sep-17 and High Street Phoenix – in Mumbai in Nov-17
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RETAIL PRESENCE
Ludhiana
Noida
Vasai
- 3
Bengaluru
Present across 29 cities in 14 states
PAN-INDIA PRESENCE WITH 41 STORES WITH A RETAIL SPACE OF ~120,699 SQ. FT. SPREAD ACROSS 29 CITIES IN 14 STATES
NUMBER OF STORES
TILL DATE
Large Format (> 2,000 sq. ft.)
Small Format (<= 2,000 sq. ft.)
Total Stores
Total Area
31
10
41
~120,699
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RETAIL FOOTPRINT EXPANSION
82,368
25
88,093
91,058
27
28
98,200
1,02,930
30
32
1,20,699
41
1,10,666
37
FY13
FY14
FY15
FY16
FY17
FY18
9M FY19
No. of Retail Outlets
Carpet Area (sq. ft.)
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DISCUSSION SUMMARY
• Q3 & 9M FY19 Results Update
• About Us
• Operational Summary
•
Business Model
OPERATIONAL SUMMARY
GOLD & DIAMOND VOLUMES
52,010
43,808
4,361
4,706
4,216
39,958
40,762
3,738
3,931
45,111
FY14
FY15 Gold Sales (kgs)
FY16
FY17
FY18
Diamond Sales (cts)
SSSG - TOTAL (%)
AVERAGE TICKET SIZE (RS ‘000)
4.0
-9.9
FY14
FY15
-16.5
FY16
SSSG: Same store sales value growth
0.1
-2.1
FY17
FY18
131
139
84
85
122
73
115
80
129
91
FY14
FY15
FY16
FY17
FY18
Gold Diamond
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DISCUSSION SUMMARY
• Q3 & 9M FY19 Results Update
• About Us
• Operational Summary
•
Business Model
BUSINESS MODEL: MANUFACTURING
Gold
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
Each vendor has an annual gold processing capacity of more than 100 kg.
These vendors are associated with TBZ since generations and are experts in handmade regional jewellery designs.
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T N E M E R U C O R P
I
G N R U T C A F U N A M
BUSINESS MODEL: MANUFACTURING
Diamond
Raw Material - Cut & polished diamonds
• Sources: •
DTC site holders
•
In-house diamond jewellery manufacturing leading to exclusive designs, lower costs, and higher margins
• Manufacturing facility at Kandivali, Mumbai spread over ~24,000 sq ft with capacity of ~200,000 cts (on dual shift basis).
•
The facility also has capacity for 4,000 kg of gold refining and 4,500 kg of gold jewellery components manufacturing.
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T N E M E R U C O R P
I
G N R U T C A F U N A M
BUSINESS MODEL: RETAIL
EFFICIENT INVENTORY MANAGEMENT
HUB & SPOKE MODEL - ROI OPTIMISATION
SMALL STORE
SMALL STORE
LARGE FORMAT STORE
SMALL STORE
•
•
•
•
•
SMALL STORES
<= 2,000 sq ft Across the city Smaller range Lower price points (up to Rs 500k)
LARGE STORES
> 2,000 sq ft Standalone high street - heart of city
• • Wider range •
Higher price points (up to Rs 2,000k)
SMALL STORE
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BUSINESS MODEL: SCALABILITY
• TBZ has an expansion plan to increase its retail space from ~120,699 sq. ft. at present to
around 1,50,000 sq. ft. over near term.
• TBZ plans to carry out the expansion through mix of franchisee route and addition of its own
stores.
• All the prospective expansion locations have already been identified backed by 2 years of
extensive market research.
Number of Stores
Retail Sq ft
Number of Cities
FY12
14
~48,000
10
Till Date
41
~120,699
29
Target
~1,50,000
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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. The contract for gold lease is 180 days. TBZ provides a bank guarantee worth 110% of gold leased. Total Financing cost (interest on gold lease plus bank guarantee commission) to TBZ is ~3.5% p.a.
GOLD METAL LOAN ADVANTAGES
Interest Cost Savings: Borrowing cost on gold lease is significantly lower compared to working capital borrowing cost.
No Commodity Risk: Since gold is taken on lease, there is no gain if gold prices increase or loss if gold prices decrease.
•
•
• •
•
•
•
•
•
TBZ repays the gold daily based on actual sales of gold jewellery. The bank converts 1 kg of gold on lease as a sale to TBZ at a reference rate set by them as on day 1. TBZ books a purchase of 1 kg of gold. The balance 9 kg worth of gold continues to remain on lease. TBZ again replenishes the inventory by taking 1 kg of gold on lease from bank on day1. Since TBZ’s gold jewellery inventory turns 2-3 times, it repays the gold lease before 180 days.
GOLD METAL LOAN LIMITATIONS
Sharp increase in gold prices: Gold lease is marked to market on a daily basis. So any increase in gold price will cause TBZ to top up its bank guarantee. Bank Guarantee limitations: Bank guarantee issued by the bank to TBZ is based on the drawing power enjoyed by TBZ. Contract Period: If TBZ is unable to sell the gold on lease within 180 days, then they will have to convert the balance unutilized gold to purchase.
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AWARDS & RECOGNITION
•
•
•
•
•
•
•
•
“DIAMOND VIVAH JEWELLERY OF THE YEAR” Retail Jeweller India Awards - 2018
“INDIA’S MOST PREFERRED JEWELLERY BRAND” UBM India - 2017
“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– 2016 ” JJS-IJ Jewellers’ Choice Design Award - 2016
“ASIA’S MOST POPULAR BRANDS – 2014 ” World Consulting & Research Corporation (WCRC) - 2014
“BEST JEWELLERY COMPANY AWARD” Gems & Jewellery Trade Council of India Excellence Awards - 2014
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Saurav Banerjee Chief Financial Officer Tribhovandas Bhimji Zaveri Limited +91 022 30735000 saurav.banerjee@tbzoriginal.com
Nilesh Dalvi IR Consultant Dickenson Seagull IR +91 9819289131 nilesh.dalvi@dickensonir.com
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