Titan Industries Limited Delivering value by creating Brands - - PowerPoint PPT Presentation

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Titan Industries Limited Delivering value by creating Brands - - PowerPoint PPT Presentation

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Titan Industries Limited Delivering value by creating Brands October 2012 TITAN Disclaimer Certain statements are included in this release which contain words or phrases such as will, aim, will likely result,

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TITAN

Titan Industries Limited

“Delivering value by creating Brands”

October 2012

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TITAN

Disclaimer

Certain statements are included in this release which contain words or phrases such as “will,” “aim,” “will likely result,” “believe,” “expect,” “will continue,” “anticipate,” “estimate,” “intend,” “plan,” “contemplate,” “seek to,” “future,” “objective,” “goal,” “project,” “should,” “will pursue” and similar expressions or variations of these expressions that are “forward-looking statements.” Actual results may differ materially from those suggested by the forward-looking statements due to certain risks or uncertainties associated with our expectations with respect to, but not limited to, our ability to implement our strategy successfully, the market acceptance of and demand for our products, our growth and expansion, the adequacy of our allowance for credit to franchisees, dealers and distributors, technological changes, volatility in income, cash flow projections and our exposure to market and operational risks. By their nature, certain of the market risk disclosures are only estimates and could be materially different from what may actually occur in the future. As a result, actual future gains, losses or impact on net income could materially differ from those that have been estimated. In addition, other factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this document include, but are not limited to: general economic and political conditions in India and the other countries which have an impact on our business activities; inflation, unanticipated turbulence in interest rates, foreign exchange rates, the prices of raw material including gold and diamonds, or other rates or prices; changes in Indian and foreign laws and regulations, including tax and accounting regulations; and changes in competition and the pricing environment in India. The Company may, from time to time make additional written and oral forward-looking statements, including statements contained in the Company’s filings with SEBI and the Stock Exchanges and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company, to reflect events or circumstances after the date thereof.

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TITAN

Silver Jubilee: The Journey

1993: Europe Foray 1994: Timex JV 1996: Tanishq 2003: Fastrack 2007: Eyewear 2010: Fastrack Accessories 2006: GoldPlus 1984: Conceived 1998: Sonata Launch 2005: Precision Engineering (PED) 2008: Zoya 2009: Helios 1987 1987: Launch of Titan watches 2011: Mia

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TITAN

Luxury Premium Mid Market Mass Market

Our Brands

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TITAN

Mid Market Mass Market Luxury Premium

2 32 348 122 134

32

209

879 exclusive stores 166 Towns Over a million sft of retail space

726

India’s largest specialty retailer

Service Centres

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TITAN

International presence

Singapore - 77 Malaysia- 158 Thailand- 66 Pakistan- 32 Sri Lanka- 74 Bangladesh - 135 Maldives - 15 Nepal - 45 Fiji- 4 Vietnam- 133 UAE- 146 Oman - 134 Saudi Arabia - 642 Qatar - 58 Bahrain - 60 Kuwait - 41 Mauritius- 17 Kenya - 23 Iran- 41 Ethiopia – 11 Uganda - 15 Djibouti - 1 Nigeria- 10 Ghana - 5 Yemen - 15 Brunei- 10

31 Countries 2,160 outlets

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TITAN

Where we stand today

  • World’s 5th largest Watch Manufacturer
  • 65% market share in organized watch market
  • Sonata: India’s largest selling watch brand
  • Fastrack: India’s largest youth brand
  • Tanishq: India’s leading Jewellery player
  • Titan Eye+: India’s largest retail chain in Eyewear
  • Strength in Retail: 879 stores with over 1.1 million sft
  • Distribution: More than 11,000 Multi-brand outlets
  • Precision Engineering: Preferred vendor for high

precision components to many global manufacturers

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TITAN

Watches Division

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TITAN

Watches

  • Four major brands
  • Sold through

– Exclusive “World of Titan” outlets – “Fastrack” outlets – Multi-brand outlets “Helios” – Multi-brand dealers and stores – Large-format stores like Shoppers’ Stop, Lifestyle, etc.

  • Large network of exclusive service centers
  • Sophisticated Design & Development

Center

– Core strength in Industrial, Retail and Graphic design – Numerous international award-winning designs to its credit

  • Hosur

Pantnagar

  • Dehradun

Goa Roorkee

Manufacturing & Assembly facilities

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TITAN

Watches – Distribution

  • 11,000 dealers
  • 2,500 towns

Retail All India

  • 348 showrooms (11 added in Q2)
  • 139 towns – 355k Sft

World of Titan

  • 122 stores / kiosks (12 added in Q2)
  • 57 towns – 61k sft

Fastrack

  • 32 stores (7 added in Q2)
  • 13 towns – 50k sft

Helios

  • 726 outlets
  • 266 towns

Service Centres

  • 2,160 outlets
  • 31 countries

International

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TITAN

Jewellery Division

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TITAN

Jewellery

 Largest jewellery retailer in India  Three major brands – Tanishq, GoldPlus and Zoya  Sub-brand - Mia, for the working woman; fq for the teens  Manufacturing facilities in Hosur (Tamil Nadu), Dehradun and Pantnagar (Uttarakhand)  Innovative Services – Golden Harvest / Future scheme, gift vouchers, gold exchange schemes and made to order facility  Loyalty Programmes - Anuttara & Ananta  Customer First and Lean initiatives in manufacturing and retailing  Transforming industry practices – karatmeter, karigar parks/centres, transparency, 100% hedging of gold, etc.

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TITAN

  • 136 stores including 2 Zoya stores (2

added in Q2)

  • 455k sft (34k sft added in Q2)
  • 81 towns

Tanishq

  • 32 stores
  • 67k sft
  • 32 towns

GoldPlus

Jewellery – Distribution

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TITAN

Eyewear & Precision Engineering

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TITAN

Eyewear

  • India’s largest optical retail chain:

– 209 retail outlets across 78 towns

  • Zero-error eye testing in state-of-the-art optometry clinics
  • Lens manufacturing and distribution facility at Chikkaballapur, near

Bangalore

  • Products include frames, lenses, sunglasses, contact lenses, ready readers

and accessories

  • Three in-house brands: Titan, Eye+ and Dash
  • Several international and luxury brands
  • Customer loyalty program: Vista
  • Tie-up with Sankar Nethralaya for training of store staff and optometrists
  • Key differentiators: Style consultants, Zero-error prescription, free eye

testing, scratch-resistant lens, hydrophobic lens, lens accuracy certificate

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TITAN

Precision Engineering

  • Leverages engineering capabilities
  • B2B business – balances risk of B2C businesses
  • Sub-division PECSA (Precision Engineering Component and Sub-

assemblies) - provides components and sub-assemblies to Aerospace, Automotive, Oil & Gas, Electrical and Medical Equipments industries

  • Sub-division MBA (Machine Building and Automation) - provides

assembly and testing lines catering to Automotive, Electrical & Electronics, Solar and Medical Equipments industries

  • Sixty clients across the world including:

Eaton, US

Hamilton Sunstrand, US

Microtechnica, Italy

Pratt & Whitney, US

Ford, UK

Bosch, India

Timken, India

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TITAN

Q2 Performance

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TITAN

Q2 - Background

  • Economic slowdown along with high inflation, high interest rates and

weaker rupee continue to affect demand though consumer sentiment was better than in Q1

  • Persistent high gold prices affected gold volumes – customers paid

more, but bought lower quantity

  • Company focus on retail network expansion continues – 32 outlets

(59k sft) added during the quarter across divisions

  • Titan “TAGGED” collection of watches launched
  • Sonata Super Fibre Ocean Series - the first Indian touch screen watch -

launched

  • Titan Eye+ launched "Trendz“ frames and "Titan ACE” value range of

lenses

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TITAN

Sales value growth Like to like growth World Of Titan 4%

  • 1%

Tanishq 19% 12% Goldplus

  • 2%
  • 8%

Helios 127% 19% Fastrack 71% 7% LFS – Watches 7%

  • 10%

Titan Eye+ 32% 19%

Q2 - Retail growth

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TITAN

Company performance

Q2 Performance YTD Performance

  • Revenue growth at 10% ; lower demand

due to high gold prices and slowdown in economy

  • PBT growth of 18% possible due to

better Jewellery margins

  • PAT growth : 18%
  • Revenue growth : 9%
  • PBT growth : 13%
  • PAT growth : 13%

2,061 210 153 2,258 248 180 500 1,000 1,500 2,000 2,500 Net Sales PBT PAT Rs Crores Q2 FY11-12 Q2 FY12-13 4,065 407 297 4,433 460 336 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Net Sales PBT PAT Rs Crores FY11-12 FY12-13

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TITAN

Watches

Q2 Performance YTD Performance

417 67 472 55 50 100 150 200 250 300 350 400 450 500 Net Sales PBIT Rs Crores Q2 FY11-12 Q2 FY12-13 733 115 832 105

  • 100

200 300 400 500 600 700 800 900 Net Sales PBIT Rs Crores FY11-12 FY12-13

  • Volume growth of 4% despite economic

slowdown

  • Revenue growth of 13% - impact of price

increases over the last one year

  • Margin affected by excise duty hike, and

higher material costs and overheads

  • Volume growth : 1%
  • Revenue growth : 14%
  • Margin decline and higher overheads

result in PBT decline

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TITAN

Jewellery

Q2 Performance YTD Performance

1,632 159 1,724 215 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Net Sales PBIT Rs Crores Q2 FY11-12 Q2 FY12-13

  • Customer growth : 7%, Ticket size

increased by 10%, Studded share: 32%

  • Revenue growth : 6% -retail growth

healthier at 17%

  • Margins better – higher studded share,

better terms of trade, price increase

  • PBIT growth : 35%

3,279 325 3,499 396 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Net Sales PBIT Rs Crores FY11-12 FY12-13

  • Customer growth : 2%
  • Studded share : 27%
  • Revenue growth : 7%
  • PBIT growth : 22%
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TITAN

“Others” Segment

Q2 Performance YTD Performance

65

  • 1

97

  • 4
  • 20

20 40 60 80 100 120 Net Sales PBIT Rs Crores Q2 FY11-12 Q2 FY12-13 143

  • 5

187

  • 6
  • 20

30 80 130 180 230 Net Sales PBIT Rs Crores FY11-12 FY12-13

  • Revenue growth : 49%
  • Eyewear growth impressive at 32%
  • PED continues to grow profitably
  • Revenue growth : 31%
  • Eyewear revenue growth : 4%
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TITAN

Capital Employed

  • Higher inventory levels and investments in fixed assets contributed to

increase in capital employed

452 635 134 122 1,343 595 839 174 169 1,778 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Watches Jewellery Others Corporate Company Rs Crores Sep-11 Sep-12

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TITAN

Performance Trends (Half-yearly)

2,030 2,645 2,789 3,732 4,065 4,774 4,433 1,000 2,000 3,000 4,000 5,000 6,000 H1FY09-10 H2FY09-10 H1FY10-11 H2FY10-11 H1FY11-12 H2FY11-12 H1FY12-13 (Rs Crores)

Total Sales

1,458 2,046 2,079 2,976 3,279 3,786 3,499 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 (Rs Crores)

Jewellery: Sales

504 523 614 658 733 797 832 100 200 300 400 500 600 700 800 900 (Rs Crores)

Watches: Sales

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TITAN

Performance Trends (Half-yearly)

161 160 279 320 407 432 460 50 100 150 200 250 300 350 400 450 500 H1FY09-10 H2FY09-10 H1FY10-11 H2FY10-11 H1FY11-12 H2FY11-12 H1FY12-13 (Rs Crores)

PBT

88 57 120 72 115 101 105 20 40 60 80 100 120 140 (Rs Crores)

Watches: PBIT

109 146 172 285 325 373 396 50 100 150 200 250 300 350 400 450 (Rs Crores)

Jewellery: PBIT

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TITAN

Performance Trends

3,041 3,848 4,703 6,571 8,971 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 2007-08 2008-09 2009-10 2010-11 2011-12 (Rs Crores)

Total Sales

2,027 2,761 3,497 5,014 7,045 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 2007-08 2008-09 2009-10 2010-11 2011-12 (Rs Crores)

Jewellery: Sales

918 946 1,052 1,309 1,592 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2007-08 2008-09 2009-10 2010-11 2011-12 (Rs Crores)

Watches: Sales 31% 15% 36%

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TITAN

Performance Trends (contd.)

150 159 250 430 600 100 200 300 400 500 600 700 2007-08 2008-09 2009-10 2010-11 2011-12 (Rs Crores)

PAT

202 231 321 599 838 100 200 300 400 500 600 700 800 900 2007-08 2008-09 2009-10 2010-11 2011-12 (Rs Crores)

PBT 43% 41%

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TITAN

Performance Trends (contd.)

Cash balance up by Rs. 908 crores over the period

718 745 802 1,095 1,457 200 400 600 800 1,000 1,200 1,400 1,600 2007-08 2008-09 2009-10 2010-11 2011-12 (Rs Crores)

Capital Employed

39.4% 32.2% 39.2% 49.2% 48.5% 0% 10% 20% 30% 40% 50% 60% 2007-08 2008-09 2009-10 2010-11 2011-12

RONW

34.8% 34.2% 45.4% 58.5% 62.0% 0% 10% 20% 30% 40% 50% 60% 70% 2007-08 2008-09 2009-10 2010-11 2011-12

ROCE

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TITAN

Market Capitalisation

Based on BSE closing prices at the end of the period

214 452 980 3,530 3,735 4,715 3,462 8,172 16,916 20,295 23,220 5,000 10,000 15,000 20,000 25,000 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Sep-12 (Rs Crores)

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TITAN

Recent Recognition

  • Titan enters Forbes Asia’s FAB 50 companies list
  • Titan is among only five Indian companies in CLSA’s top 50 Asian

companies in corporate governance

  • IMAGES Fashion Award for Most Admired Fashion Company of the

Year

Corporate

  • IAMAI Digital Media Awards: Gold awards for TITAN & Fastrack
  • Brand Trust Report card (2012): TITAN is 12th most trusted across

categories, Fastrack is 59th.

  • 4 awards for TITAN and 1 award for Fastrack at the “Creative ABBY

Awards” 2012

Watches

  • Qimpro Bestprax award for Innovation for “Innovative Diamond

Setting Process” and “Tanishq Mobile Karat Meter”

  • CII Special Recognition award for “Kaizen -Operation Efficiency”
  • IMAGES Fashion Award for Most Admired Jewellery Brand of the Year

for Tanishq

  • Award for Tanishq at the “Creative ABBY Awards” 2012

Jewellery

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TITAN

Thank You