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: 14th February, 2020
To, The Manager, Compliance Department, National Stock Exchange of India Limited Exchange Plaza, Plot No. C/1 , G Block, Bandra-Kurla Complex, Sandra (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: Tri bhovandas Bhimli Zaveri Limited. Script Code & 10: 534369 / TBZ Sub:
I Analysts' Presentation {Disclosure of Material Event/ Invest ors Informati on under Regulation 30 of SEBI (listing Obligations and Disclosure Requirements) Regulations, 201 5}
Further to our letter dated 7th February, 2020 on the Conference Call, and pursuant to Regulation 30(6) of the Securities and Exchange Board 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, 14'h February, 2020 at 4.30 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 Bhi mji Zaveri Limited
Niraj Oza Head ·Legal & Company Secretary
Encl: as above
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INVESTOR PRESENTATION Q3 & 9M FY20 RESULTS FEBRUARY 2020
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 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.
2
DISCUSSION SUMMARY
•
•
•
•
Q3 & 9M FY20 Results Update
About Us
Operational Summary
Business Model
Q3 FY20 RESULT HIGHLIGHTS
REVENUES & GROSS MARGIN
*EBITDA & EBITDA MARGIN
PAT & PAT MARGIN
13.9%
5,917
12.1%
6,446
5.1%
301
6.2%
401
1.9%
111
2.2%
140
In Rs Mn
Q3 FY19
Q3 FY20
Q3 FY19
Q3 FY20
Q3 FY19
Q3 FY20
OPERATING COSTS (% of Total Revenue)
REVENUE ANALYSIS
Q3 FY20
Q3 FY19
3.1%
1.4%
1.4%
3.5%
2.4%
1.3%
1.6%
Manpower
Advertisment
Rentals
Other Overheads
Total Revenue Growth % - Q3 FY20
Same Store Sales Growth % - Q3 FY20
9%
9%
Share of Diamond Jewellery - Q3 FY20 (Q3 FY19)
21.3% (23.4%)
*On comparable basis (before taking into account IND AS 116) Q3 FY 20 EBITDA Margins are 5.1%, Rentals are 1.1% of total revenue
4
9M FY20 RESULT HIGHLIGHTS
REVENUES & GROSS MARGIN
*EBITDA & EBITDA MARGIN
PAT & PAT MARGIN
14.6%
13,483
13.5%
14,675
4.4%
598
6.0%
878
1.0%
141
1.2%
180
In Rs Mn
9M FY19
9M FY20
9M FY19
9M FY20
9M FY19
9M FY20
OPERATING COSTS (% of Total Revenue)
REVENUE ANALYSIS
9M FY20
9M FY19
4.0%
1.8%
1.8%
4.1%
2.5%
1.6%
2.0%
Manpower
Advertisment
Rentals
Other Overheads
Total Revenue Growth % - 9M FY20
Same Store Sales Growth % - 9M FY20
9%
6%
Share of Diamond Jewellery - 9M FY20 (9M FY19)
22.8%(22.8%)
*On comparable basis (before taking into account IND AS 116) 9M FY 20 EBITDA Margins are 4.5%, Rentals are 1.5% of total revenue
5
Q3 FY20 BALANCE SHEET UPDATE
LEVERAGE ANALYSIS
TOTAL DEBT BREAKUP
1.14
4,941
5,657
4,960
0.98 4,855
Mar-19
Dec-19
Equity
Net Debt
Net Debt/Equity
6,054
3,000
3,054
Mar-19
Working Capital Debt
Gold on Loan
In Rs Mn
5,269
1,951
3,318
Dec-19
Notes:
1) Gold on Loan is shown as part of short term borrowings, while some of the listed peers show it under current liabilities / trade payables.
2) Out Of Total Gold inventory as on 31th Dec 2019 Gold on Loan is 33.7% as compared to 57.2% as on 31st March 2019
6
Q3 FY20 - KEY RESULT TAKEAWAYS
REVENUE & MARGIN:
• Revenue for Q3 FY20 Increased by 9% YoY on the back of festive and wedding seasons
coupled with various promotional /marketing initiatives taken by the company.
• Gross Margin for Q3 FY 20 were lower on account of relatively higher sales mix in favour
of gold as compared to the normal trend
• EBITDA Margin during the quarter has improved due to effectiveness of marketing
spends, manpower rationalisation , automation & constant review of other operating
costs
• Finance cost shows decrease of 7.9% YoY (not considering impact of INDAS 116)
BALANCE SHEET & CASH FLOW:
• Reduction in Net Debt by Rs802 Mn compared to Mar19 ( Rs5657 Mn)
• Net Debt to Equity Ratio has improved from 1.14x in Q3 FY19 to 0.98x in Q3 FY20
•
Inventory volumes have been rationalised over the past nine months.
7
Impact of IND AS 116
IND AS 116 (Accounting for leases) was mandated from 1st April 2019
This Ind-AS has the following impact:
1) On Profit & Loss: Lease Rental expenses is replaced by Depreciation and Interest Expenses. 2) On Balance sheet: The Accounting Standard essentially brings all the leases into the balance sheet as a “Right to use” on asset side with a corresponding “Lease obligation” on Liability Side.
The Company has opted to adopt “Modified Retrospective approach”, by which we go back to the start of the leases and arrive at the “Right to use” assets and the “Lease obligation” on 1st April 2019 and the difference between the liabilities and assets is reduced from the opening net worth as on 1st April 2019.
The actual impact of adoption of Ind-AS is as follows: -
For quarter ending 31st Dec 2019, Rent expenses has decreased by Rs.73Mn offset by increase in depreciation by Rs.55Mn and interest expense by Rs.24Mn resulting into higher EBITDA by Rs.73Mn lower PBT by Rs.5.8Mn.
As at 1 April 2019 we recognised Right to use assets of Rs.794Mn and Lease liability of Rs.956Mn and the difference of Rs.106Mn (net of deferred tax of Rs.56Mn.) has been adjusted in retained earnings.
8
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
TBZ has recently launched Bridal collection Riwayat
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
Launched Tatva- Affordable gold, jewellery collection with Sarah Ali Khan
9
LATEST LAUNCHES & COLLECTION
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CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
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CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
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CONTEMPORARY JEWELLERY DESIGNS & COLLECTIONS
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15
Q3 FY20 - PROFIT & LOSS STATEMENT
Particulars (In Rs Mn) – Standalone
Net Revenues
COGS
Gross Profit
Gross Margin (%)
Personnel Expenses
Other Expenses (refer slide 8)
EBITDA
EBITDA Margin (%)
Depreciation (refer slide 8)
Other Income
Interest Expenses (refer slide 8)
Profit Before Tax
Tax
PAT
Q3 FY20
Q3 FY19
YoY %
9M FY20
9M FY19
YOY %
FY19
6,446
5,663
783
12.1%
200
182
401
6.2%
79
13
133
202
61
140
5,917
5,098
819
13.9%
204
314
301
5.1%
27
14
118
170
59
111
8.9%
11.1%
-4.5%
-171 bps
-2.2%
-41.9%
32.9%
112 bps
194.5%
-0.44%
13.0%
18.5%
3.9%
26.3%
30 bps
14,675
12,688
1,987
13.5%
580
529
878
6.0%
234
39
419
264
84
180
13,483
11,520
1,963
14.6%
547
818
598
4.4%
72
32
342
216
75
141
1.2%
1.0%
8.8%
10.1%
1.2%
-102 bps
6.1%
-35.4%
46.8%
155 bps
229.9%
24.3%
22.4%
22.1%
12.47%
27.2%
18 bps
17,638
15,149
2,489
14.1%
732
1,019
738
4.2%
99
56
464
231
78
153
0.9%
16
PAT Margin (%)
2.2%
1.9%
DISCUSSION SUMMARY
•
•
•
•
Q3 FY20 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
•
•
39 stores (116,561sq. ft.)
Presence – 27 cities, 13 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
18
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 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
19
RETAIL PRESENCE
Present across 27 cities in 13 states
PAN-INDIA PRESENCE WITH 39 STORES WITH A RETAIL SPACE OF ~116,561 SQ. FT. SPREAD ACROSS 27 CITIES IN 13 STATES
NUMBER OF STORES
TILL DATE
Large Format (> 2,000 sq. ft.)
Small Format (<= 2,000 sq. ft.)
Total Stores
Total Area
31
8
39
~1,16,561
20
RETAIL FOOTPRINT EXPANSION
82,368
25
88,093
91,058
27
28
98,200
30
1,02,930
32
1,20,699
41
1,10,666
37
FY13
FY14
FY15
FY16
FY17
FY18
FY19
No. of Retail Outlets
Carpet Area (sq. ft.)
21
DISCUSSION SUMMARY
•
•
•
•
Q3 FY20 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
FY15
0.1
-2.1
-0.4
-16.5
FY16
FY17
FY18
FY19
SSSG: Same store sales value growth
139
85
122
73
115
80
129
91
103
89
FY15
FY16
FY17
FY18
FY19
Gold
Diamond
23
DISCUSSION SUMMARY
•
•
•
•
Q3 FY20 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.
T N E M E R U C O R P
I
G N R U T C A F U N A M
25
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.
T N E M E R U C O R P
I
G N R U T C A F U N A M
26
BUSINESS MODEL: RETAIL
EFFICIENT INVENTORY MANAGEMENT
HUB & SPOKE MODEL - ROI OPTIMISATION
SMALL STORE
SMALL STORE
LARGE FORMAT STORE
SMALL 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)
27
BUSINESS MODEL: SCALABILITY
•
•
•
TBZ has an expansion plan to increase its retail space 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
39
~116,561
27
Target
~1,50,000
28
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
BEST BRACELET DESIGN AWARD AT THE 9TH EDITION OF
JJS-IJ JEWELLERS CHOICE DESIGN AWARDS 2019
“CONTEMPORARY DIAMOND JEWELLERY AWARD” &
“TREASURE OF THE OCEAN “
GJC’S NATIONAL JEWELLERY AWARD 2018
“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
•
•
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•
•
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The original since 1864
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T RI BHOVAN DAS B H I MJ I ZAVER I \llRit....\Vf ;r_\\'I.RI CROll!-'
Saurav Banerjee Chief Financial Officer Tribhovandas Bhimji Zaveri Limited +91 022 30735000 saurav.banerjee@tbzoriginal.com
I DICKENSON I
Manasi Bodas / Chintan Mehta IR Consultant Dickenson +91 9821043510 /9892183389 tbz@dickensonworld.om
31