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: 16th May, 2019
To, The Manager, Compliance Department, National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.
To, The Manager, Compliance Department, SSE Limited Corporate Service Department, Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001 .
Dear Sir I Madam.
Re: Sub:
Tribhovandas Bhimji Zaveri Limited. Script Code & 10: 534369 I TBZ Investors I Analysts ' Presentation {Disclosure of Mate rial Eventl Info rm ati o n under Regu lation 30 of SEB I lListing Obligations and Disclosure Requ irements) Regu lations , 2015}
Further to our letter dated 10th May, 20 19 On the Conference Call, and pursuant to Regulation 30(6) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirement s) Regulation s, 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 Thursday , 16th May, 2019 at 4.30 p.m. (1ST) is enclosed and the said Earnings Presentation has also been uploaded on the Compa ny's Websi te at www .tbztheoriginal.com.
We request you to kindly take the same on record.
Thanking You .
Yours faithfu lly, For Tribhovandas Bh im j i Zaveri Lim ited
~
Niraj Oza Head - Legal & Company Secretary
Encl: as above
Regd Office 241/43, laveri Bazar. Mumbai . ~oo 002. Tel.. +91.22.39565001.9122.40465001 fox' +91 22.39565056.
11th Floor, West Wing, Tulsiani Chambers, Free Press Journal Rood, Nariman Point, MumbOi
400021 Tel, 022 30735000, 91,22.49255000
fax 02230735088 www.\t)z!heoognalcom
TRIBHO\A D."~ BHIMJI ,
...HRI (TU.
CIN No L27205MH2007PLC172598
INVESTOR PRESENTATION Q4 & FY19 RESULTS MAY 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
• Q4 & FY19 Results Update
• About Us
• Operational Summary
•
Business Model
FY19 RESULT HIGHLIGHTS
REVENUES * & GROSS MARGIN
EBITDA & EBITDA MARGIN
PAT & PAT MARGIN
In Rs Mn
14.1%
17,514
14.1%
17,638
4.2%
731
4.2%
738
1.2%
211
0.9%
153
FY18
FY19
FY18
FY19
FY18
FY19
* Net of Excise Duty
OPERATING COSTS (%)
REVENUE ANALYSIS
FY19
4.1%
2.2%
1.6%
2.0%
FY18
4.2%
2.3%
1.4%
2.0%
Salaries
Advertisment
Rentals
Other Overheads
Total Revenue Growth % - FY19
Same Store Sales Growth % - FY19
0.7%
-0.4%
Share of Diamond Jewellery - FY19 (FY18)
22.0% (23.4%)
4
Q4 FY19 RESULT HIGHLIGHTS
REVENUES & GROSS MARGIN
EBITDA & EBITDA MARGIN
PAT & PAT MARGIN
In Rs Mn
13.0%
4,336
12.7%
4,155
4.4%
190
3.4%
140
1.6%
70
0.3%
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Q4 FY18
Q4 FY19
Q4 FY18
Q4 FY19
Q4 FY18
Q4 FY19
OPERATING COSTS (%)
REVENUE ANALYSIS
Q4 FY19
Q4 FY18
4.4%
1.1%
1.7%
2.0%
4.1%
1.4%
1.5%
1.6%
Salaries
Advertisment
Rentals
Other Overheads
Total Revenue Growth % - Q4 FY19
Same Store Sales Growth % - Q4 FY19
-4.2%
-8.2%
Share of Diamond Jewellery - Q4 FY19 (Q4 FY18)
19.1% (20.9%)
5
FY19 BALANCE SHEET UPDATE
LEVERAGE ANALYSIS (RS MN)
1.09
1.14
4,867
5,313
4,941
5,657
Mar-18
Mar-19
Equity
Net Debt
Net Debt/Equity
GOLD INVENTORY BREAKUP (%)
TOTAL DEBT BREAKUP (RS MN)
60.7%
39.3%
Mar-18
57.2%
42.8%
Mar-19
Own Gold
Gold on Loan
5,687
2,784
2,903
Mar-18
6,054
3,000
3,054
Mar-19
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
6
Q4 & FY19 - KEY RESULT TAKEAWAYS
REVENUES & OPERATING MARGINS:
• Revenues declined by 4.2% YoY
• No contribution from Gudi Padwa festival which occurred in April
2019 compared to March 2018
• Higher redemptions under KP scheme in Q4 FY18
• Gross margin declined marginally from 13.0% to 12.7% due to lower share of diamond jewellery (19.1% in Q4 FY19 vs. 20.9% in Q4 FY18)
• EBITDA & EBITDA margin declined in line with lower sales, while there
was a modest increase in operating expenses
BALANCE SHEET:
•
•
•
Inventory and total debt remained stable during Q4 FY19
During FY19, inventory increased by 16.2% and debt increased by 6.4%, as the company added 5 new stores
Finance Cost increased in line with incremental debt. The average cost of debt was 7.9% in FY19 compared to 7.1% in FY18
RETAIL SPACE ADDITION
• 5 new stores were added in FY19
• Lucknow – March 2019, Bengaluru – January 2019, Ludhiana – November
2018, Pune – October 2018 and Noida – August 2018
• Total store count - 42 stores with ~123,219 sq. ft. spread across 30 cities
in 14 states
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BRAND BUILDING & MARKETING INITIATIVES
• TBZ has been making consistent
investments in its marketing activities to widen its customer base and promote the brand in India
• Recently TBZ appointed Bollywood actress Sara Ali Khan as new brand ambassador
• Sara Ali Khan will feature in several brand
campaigns endorsing the ‘TBZ-The Original’ brand across India
•
Launched Sitara – Affordable diamond jewellery collection range with Sara Ali Khan
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CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
9
CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
10
CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
11
CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
12
Q4 & FY19 - PROFIT & LOSS STATEMENT
Particulars (In Rs Mn) – Standalone
Q4 FY19
Q4 FY18
YoY %
FY19
FY18
YoY %
-4.2%
17,638
17,514
Net Revenues
COGS
Gross Profit
4,155
3,629
526
4,336
3,774
562
-3.8%
-6.4%
Gross Margin (%)
12.7%
13.0%
-30 bps
Personnel Expenses
Other Expenses
EBITDA
185
201
140
177
195
190
4.2%
3.1%
-26.1%
EBITDA Margin (%)
3.4%
4.4%
-100 bps
Depreciation
Other Income
Interest Expenses
Profit Before Tax
Tax
PAT
28
24
121
15
3
12
21
32
99
101
31
70
33.6%
-22.8%
22.9%
-85.4%
-89.9%
-83.4%
15,149
2,489
14.1%
732
1,019
738
4.2%
99
56
464
231
78
153
15,053
2,461
14.1%
730
1,000
731
4.2%
85
70
397
319
108
211
0.7%
0.6%
1.1%
6 bps
0.2%
2.0%
1.0%
1 bps
16.8%
-20.4%
16.7%
-27.6%
-28.0%
-27.3%
PAT Margin (%)
0.3%
1.6%
-134 bps
0.9%
1.2%
-33 bps
13
FY19 - BALANCE SHEET
Particulars (In Rs Mn) – Standalone
March-19
December-18 September-18
June-18
March-18
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
4,941
6,054
3,000
3,054
77
11,073
1,075
219
11,869
259
397
492
3,239
9,778
11,073
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
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DISCUSSION SUMMARY
• Q4 & 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 89 k, Diamond – Rs 103 k
Scalability & Reach
•
42 stores (123,219 sq. ft.)
Presence – 30 cities, 14 states
• Expansion Plan -
•
~150,000 sq. ft.
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
• • •
• •
29 designers (incl. 14 CAD) 8 - 10 new jewellery lines/year In-house diamond jewellery production Customer loyalty Premium pricing
16
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 42nd store in Lucknow in Mar-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
Present across 30 cities in 14 states
PAN-INDIA PRESENCE WITH 42 STORES WITH A RETAIL SPACE OF ~123,219 SQ. FT. SPREAD ACROSS 30 CITIES IN 14 STATES
Ludhiana
Noida
Lucknow
Vasai
- 3
Bengaluru
NUMBER OF STORES
TILL DATE
Large Format (> 2,000 sq. ft.)
Small Format (<= 2,000 sq. ft.)
Total Stores
Total Area
32
10
42
~123,219
18
RETAIL FOOTPRINT EXPANSION
82,368
25
88,093
91,058
27
28
98,200
102,930
30
32
123,219
42
110,666
37
FY13
FY14
FY15
FY16
FY17
FY18
FY19
No. of Retail Outlets
Carpet Area (sq. ft.)
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DISCUSSION SUMMARY
• Q4 & FY19 Results Update
• About Us
• Operational Summary
•
Business Model
OPERATIONAL SUMMARY
GOLD & DIAMOND VOLUMES
52,010
4,706
39,958
4,216
40,762
3,738
45,111
44,913
3,931
4,027
FY15
FY16
FY17
FY18
FY19
Gold Sales (kgs)
Diamond Sales (cts)
SSSG - TOTAL (%)
AVERAGE TICKET SIZE (RS ‘000)
4.0
0.1
-2.1
-0.4
-16.5
FY16
FY15
FY17
FY18
FY19
SSSG: Same store sales value growth
139
122
85
73
115
80
129
91
103
89
FY15
FY16
FY17
FY18
FY19
Gold Diamond
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DISCUSSION SUMMARY
• Q4 & 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 123,219 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
42
~123,219
30
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
Manasi Bodas / Nilesh Dalvi IR Consultant Dickenson +91 9821043510 / 9819289131 Manasi.bodas@dickensonir.com nilesh.dalvi@dickensonir.com
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