[PPT] - Presentation Results Q3 2017 Disclaimer Information contained in PowerPoint Presentation

SLIDE 1

Presentation Results Q3 2017

SLIDE 2

Disclaimer

2

Information contained in this presentation is subject to change without further notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assume no responsibility or liability for, the accuracy or completeness

f, or any errors or omissions in, to any information contained herein.

In addition, the information contains projections and forward-looking statements that reflect the company’s current views with respect to future events and financial

performance. These views are based on current assumptions which are subject to

various risks and may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the company’s assumptions are

correct. Actual results may differ materially from those projected.

This presentation is strictly not to be distributed without the explicit consent of L’azurde for Jewelry Company management under any circumstances.

SLIDE 3

2. Business Model

6-8

3. Results

9-18

4. Group Key Initiatives

19-20 Agenda

3

Pages

1. Executive Summary

4-5

5. Conclusion

21

SLIDE 4

Executive Summary

4

Q3 Revenues at +3.1% vs. LY. This was the first quarter since Q2 2016 where we had growth in

revenues. KSA wholesale revenues were up 17.4% and retail revenues were up +37% thanks to the

growth at L’azurde Mono Brand Shops and the expansion with Kenaz and the Airport Duty Free

business. Egypt wholsalese revenues were at -20% vs. LY due to the EGP devaluation. We raised

prices in Egypt the last 12 months and introduced new jewelry collections at lower weights and lower Karat (18K and 14K) across all markets to reach more appropriate consumer price points. Our Retail channel grows rapidly at +27% YTD September 2017 vs. YTD September 2016 and is

promising. it represents 28% of our revenues in YTD September 2017 vs. 17% in YTD September 2016.

L’azurde mono brand shops outperform the market and we continue investing in selective key locations at top Malls in KSA and key locations in Egypt. For the first time ever we took over the duty free business at key airports in KSA. We expanded the new L’azurde Men collection and expanded with more kiosks in top Malls for our diamonds jewelry value brand ‘Kenaz’. We continue to reduce our operating costs (YTD September 2017 at -18% vs YTD September 2016) to reduce pressure on profitability through production processes reengineering, reducing fixed costs, headcount reduction and rationalizing capital expenditure. We managed to reduce our working capital in YTD September, 2017 by 20% compared to the same period of last year. This was done by tightening credit terms given to our wholesale customers and rationalizing our inventory. These measures reduced our finance charges by 16%.

SLIDE 5

Executive Summary

5

Net income for YTD September 2017 at SAR 28.9 Million came at 60% below YTD September 2016. Net income for Q3 2017 amounted to SAR 0.5 million, an increase of SAR 0.7 million compared to the same quarter of last year before IFRS inventory adjustments. After the one-off IFRS adjustment, Net Income was lower by SAR 28.2 million. Our profitability from the Retail business is still not contributing much as we continue investing in opening new locations and launching several brands targeting different products categories, price points and usage occasions. We are very positive about the business outlook.

We execute several growth and profit enhancing long term initiatives
We diversify revenues with retail on top of wholesale business and multi-brands leveraging
ur management capabilities and Global best practice from jewelry houses/retailers
Strong design capabilities, consumer understanding and market leadership position
Opportunity to acquire given the fragmented competitive scene. We announced on

September 25, 2017 the signing of a MOU for a potential acquisition

Solid management team drove the business since 2010 to IPO is now growing the

Company back to its historical profitability

Attractive young KSA/Regional demographics and confidence in KSA economy rebound

with Government plans

SLIDE 6

L’azurde Business Model Evolution

6

L’azurde Jewelry

Gold Wholesale Business

L’azurde Jewelry

Gold Wholesale Business L’azurde Mono Brand diamond jewelry retail stores

L’azurde House of Brands

Gold Wholesale Business L’azurde retail Kenaz Value diamonds jewelry Amazing Silver fashion jewelry Others TBD

SLIDE 7

L’azurde Group: House of Brands L’azurde Business Model Evolution

7

L’AZURDE GROUP Jewelry Wholesale

14K
18K
21K

Retail

L’AZURDE

(Diamonds) 25 Locations 6 Duty Free

KENAZ

(Value Diamonds) 15 Locations

AMAZING

(Silver Fashion) 4 Locations

Others TBD, Acquisitions JV, Franchise Accessories L’azurde Men Other L’azurde Line Extensions

SLIDE 8

Gold Jewelry Wholesale Business Model Wholesale Business Model

Value Creation at L’azurde:

Creating great Gold jewelry products

(Design, technology, value offering, innovation,….)

Brand marketing
Revenues = LSC (Labor Service Charge ) +

Stones Profits

Bank Facilities + Margin Bank Facilities (Murabaha)

Banks L’azurde

Physical Gold + Labor Service Charge (SAR/USD) Gold Jewelry

2,000 Retailers L’azurde takes no position on Gold Retailers pay L’azurde:

Physical Gold + Labor Service Charge

8

L’azurde 2,000 Retailers

SLIDE 9

359.1 (84.5) (17.2) (15.2) 13.0 (3.4) 19.6 7.2 1.7 280.3 50 100 150 200 250 300 350 400

9 Retail Wholesale

Net Volume and Price Impact

Revenue Variance – YTD September 2017

Million SAR

Most of the Revenues Decline Due to EGP Devaluation

SLIDE 10

10

Group’s Quarterly Revenues Changes vs. Same Quarter LY

First Quarter Growth in Revenues Since Q2 2016

23.2%
43.7%
48.0%
31.7%
23.0%

3.1%

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%

0.0% 10.0% Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017

SLIDE 11

11 58 79% 55 72% 16 21% 21 28% 74 76

20

40 60 80 100 Q3-2016 Q3-2017 Wholesale Retail 297 83% 201 72% 62 17% 79 28% 359 280

50

100 150 200 250 300 350 YTD Sep 2016 YTD Sep 2017 Wholesale Retail

Operating Revenues by Distribution Channel

Million SAR

Retail Revenues at +27% in YTD September 2017 vs. LY

SLIDE 12

12 % of Total 62% 28% 8% 2%

Vs. 2016

3% ▼ 43% ▼ 34% ▼ 37% ▼ 171.5 79.5 23.4 5.9

20

40 60 80 100 120 140 160 180 200 KSA Egypt Other GCC Other Export

Operating Revenues by Country – YTD Sep 2017

Million SAR

KSA Outperforms Other Markets thanks to Retail

SLIDE 13

13 40 34 5 11 29 74 45

10

20 30 40 50 60 70 80 Q3-2016 Q3-2017

Wholesale Retail IFRS Adjustment

210 134 22 37 232 171

50

100 150 200 250 YTD Sep 2016 YTD Sep 2017 Wholesale Retail

Gross Margin by Distribution Channel

Million SAR

Gross Margin % (before IFRS Adjustment) Wholesale 68% 62% 71% 66% Retail 33% 51% 35% 47% Total 61% 59% 65% 61%

Retail Gross Margin +70% in YTD September 2017 vs. LY

SLIDE 14

Operating Expenses

Million SAR 34 34

5

10 15 20 25 30 35 40 Q3-2016 Q3-2017 134 109

20

40 60 80 100 120 140 160 YTD Sep 2016 YTD Sep 2017

14

Operating Expenses Decline by 18% in YTD September 2017 vs. LY

SLIDE 15

EBITDA

Million SAR 106 69 30% 25% 0% 5% 10% 15% 20% 25% 30% 35% 20 40 60 80 100 120 YTD Sep 2016 YTD Sep 2017 EBITDA EBITDA Margin

15

EBITDA Declines by 35% in YTD September 2017 vs. LY

14 13 29 43 13 19% 17% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

5

10 15 20 25 30 35 40 45 50 Q3-2016 Q3-2017

EBITDA IFRS Adjustment EBITDA Margin

SLIDE 16

Finance Charges

Million SAR 8 7

1

2 3 4 5 6 7 8 9 Q3-2016 Q3-2017 28 23 5 10 15 20 25 30 YTD Sep 2016 YTD Sep 2017

16

Finance Charges Decline by 16% in YTD September 2017 vs. LY

SLIDE 17

Group Consolidated Income Statements

Million SAR

Q3 YTD 2016A 2017A Delta 2016A 2017A Delta Revenue 73.9

100.0%

76.2

100.0%

3% 359.1 100.0% 280.3 100.0% -22.0% Cost of revenue (28.9)

39.2%

(31.2)

41.0%

8% (127.4)

35.5%

(109.6)

39.1% -14.0%

Inventory IFRS Adj.* 28.9

39.2%

0.0%

Gross Profit 73.9

100.0%

44.9 59.0%

39%

231.7 64.5%

170.7 60.9% -26.3%

Selling and marketing (26.5)

35.9%

(24.8)

32.5%
7%

(101.7)

28.3%

(82.4)

29.4%
19%

General and admin (7.6)

10.3%

(9.4)

12.4%

24% (32.2)

9.0%

(27.0)

9.6%
16%

Operating Income 39.8

53.8%

10.7

14.1%

73%

97.8

27.2%

61.3

21.9% -37.3%

Other income – net (2.6)

3.5%

(0.3)

0.4%
87%

9.9

2.8%

(0.2)

0.1% -102%

Finance Charges – net (8.1)

11.0%

(7.4)

9.7%
9%

(27.9)

7.8%

(23.4)

8.3%
16%

Net Profit before Zakat 29.1

39.4%

3.1

4.0%

90%

79.8

22.2%

37.7

13.4%

53%

Zakat (2.3)

3.1%

(2.5)

3.3%

9% (7.9)

2.2%

(8.1)

2.9%

4% Income Tax 1.9

2.6%

(0.1)

0.1% -103%

0.8 0.2%

(0.6)

0.2% -175%

Net Income 28.7

38.9%

0.5

0.7%

98%

72.7

20.2%

28.9

10.3% -60.2%

Earning per Share 0.67 0.01

98%

1.69 0.67

60%

17

Healthy gross margin % despite challenging market

(*) Inventory valuation one-off IFRS adjustment

SLIDE 18

Working Capital

Million SAR 18

957 836 870 806 693 715 784 795 947 825 425 625 644 570 1,752 1,783 1,696 1,231 1,318 1,358 1,354

200

400 600 800 1,000 1,200 1,400 1,600 1,800 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Inventories Accounts Receivable

Q3 2017AR and Inventory less than Q3 2016 by 31% and 10%

SLIDE 19

19

Group’s Capital Structure

Million SAR

Q3 2017 borrowing is less than Q3 2016 by 19%

1,488 1,521 1,397 1,021 1,082 1,130 1,121 486 479 509 402 422 405 405

200

400 600 800 1,000 1,200 1,400 1,600 Q1-2016 Q2-2016 Q3-2016 Q4-2016 Q1-2017 Q2-2017 Q3-2017 Loans Equity

SLIDE 20

20

Group Wholesale Initiatives

Celebrities Collaboration

New Collections

Campaign

Partnership with

celebrities and opinion leaders

First Ever Electro Forming Technology Expand 18K Market Share

Large volume Low

weight jewelry

Premium pricing
Distinctive high value

designs

Raise number of models

for most profitable line

Raise Prices In Egypt

Focus on profitability
Offer volume rebates to

key accounts to drive volume

Develop Exports Outside The Region Reduce Receivables To Enhance WC

First time ever L’azurde

stands at Vicenza Oror and Istanbul Fair International Exhibitions

New customers
Focus on collection of

receivables

New volume incentive

in place

SLIDE 21

21

Group Retail Initiatives

Selective L’azurde Retail Shops Expansion

Focus top locations, top

Malls

Amazing Jewelry Franchise Kenaz Jewelry Expansion

Build brand awareness
Leverage Global best

practice

Shops at 50/60m2 to

enhance profitability

Expand kiosks in top

malls

E-Commerce and New CRM Program

Building loyalty and

driving repeat purchase

E-commerce to

complement the Omni- channel strategy

Duty Free Vendor KSA Airports L’azurde Men Line Extension

Fully leverage the new

expansion at KSA Duty Free Airports

Expand products

assortment and distribution

SLIDE 22

Conclusion

22

A Challenging YTD September, 2017 A lot of good initiatives Signing of MOU for potential acquisition An upbeat management team with a solid track record Stabilizing and Recovering Markets

SLIDE 23