Presentation Results Q1 2019 Disclaimer Information contained in - PowerPoint PPT Presentation

Presentation Results Q1 2019

Disclaimer 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 of, or any errors or omissions in, to any information contained herein. In addition, the information may contain 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. 2

Agenda Pages 1. Executive Summary 4 2. Business Model 5-7 3. Results 8-14 4. Group Key Initiatives 15-16 3

Executive Summary • Q1 Revenues were 33.0% higher than same quarter of LY: Egypt’s revenues continued to perform strongly with growth of 18.5% in the wholesale channel due to a successful advertising campaign and strong customer uptake of new collections. Egypt’s retail revenues increased by 56.8% compared to the same quarter of last year due to the successful opening of six new outlets during the last twelve months. Also, Egypt retail like-for-like shops revenues increased by 20% in the first quarter of 2019. In KSA, wholesale revenues increased by 24.5% compared to the same quarter of last year due to a successful new collection and celebrity endorsement campaign. Also, KSA’s retail revenues increased by 55.6% mainly due to consolidation of revenues of the recently acquired franchise business of Tous which was acquired at the end of October 2018. • Gross profit of SAR 96.0 million for the first quarter of 2019, was 40.2% higher than the same quarter of last year mainly due to higher operating revenues. Gross Profit margin also improved by 3.2% due to cost saving initiatives that contributed in reducing production costs • Net income for Q1 2019 came at SAR 12.0 Million, 32.5% higher same quarter LY . This is due to higher operating revenues and higher gross profit margin due to cost saving initiatives that contributed in reducing the production costs. • L’azurde has ben growing revenues vs. prior year for the last four consecutive quarters . Q1 revenues and net income are the highest since 9 quarters. The Company has many initiatives to continue growing its top-line and bottom line. 4

L’azurde Business Model Evolution L’azurde House of Brands L’azurde Gold Wholesale Business Jewelry TOUS Gold Wholesale Business L’azurde retail L’azurde Jewelry L’azurde Mono Brand Kenaz Value diamonds diamond jewelry retail jewelry (Kiosks) Gold Wholesale Business 5

L’azurde Business Model Evolution L’azurde Group: House of Brands L’AZURDE GROUP Wholesale Retail L’AZURDE - 18K KENAZ TOUS 20 Shops - 21K 14 Kiosks 26 Shops 6 Duty Free 6

Wholesale Business Model Gold Jewelry Wholesale Business Model Banks Value Creation at L’azurde : • Creating great Gold jewelry products Bank (Design, technology, value offering, Bank Facilities Facilities innovation,….) + Margin (Murabaha) • Brand marketing • Revenues = LSC (Labor Service Charge ) + Stones Profits L’azurde L’azurde Retailers pay L’azurde : • Physical Gold + Labor Service Charge Physical Gold + Gold Labor Service Jewelry Charge (SAR/USD) L’azurde takes no position on Gold 2,000 Retailers 2,000 Retailers 7

Revenues Variance – Q1 2019 (Million SAR) 170 150 5.4 130 16.0 4.8 6.8 1.2 110 3.9 153.0 90 115.0 70 50 Retail Wholesale Net Volume and Price Impact 8

Group Quarterly Revenues (Million SAR) 180.0 153.0 160.0 140.0 115.0 120.0 100.1 98.5 100.0 92.8 82.2 76.2 75.1 80.0 60.0 40.0 20.0 - Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019 9

Group Quarterly Net Income (Million SAR) 14.0 12.0 12.0 10.0 9.0 8.0 6.4 6.0 4.8 3.7 4.0 2.6 2.0 0.5 0.1 0.0 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019 10

Retail Revenues at +56% in Q1 2019 vs. LY 160 153.0 140 60 115.0 120 +56% 100 38 80 60 +22% 93 40 77 20 - Q1-2018 Q1-2019 Wholesale Retail 11

KSA Revenues increased by 30% Operating Revenues by Country – Q1 2019 Million SAR 110 86.7 90 70 58.3 50 30 10 4.2 3.9 -10 KSA Egypt Other GCC Other Export % of Total 57% 38% 3% 2% Vs. 2018 30% ▲ 26% ▲ 39% ▲ >100% ▲ 12

Retail Gross Margin +82% in Q1 - 2019 vs. LY (Million SAR) 100 96 90 +82% 27 80 68 70 15 60 50 40 +29% 69 30 54 20 10 - Q1-2018 Q1-2019 Wholesale Retail 13

Group Consolidated Income Statements (Million SAR) Q1 2018A 2019A Delta Revenue 115.0 153.0 100.0% 33.0% 100.0% Cost of revenue (46.6) (57.0) -37.3% 22.5% -40.5% Gross Profit 68.5 96.0 62.7% 40.2% 59.5% Selling and marketing -35.0% 54.6% (34.6) (53.6) -30.1% General and admin (10.8) (12.0) 11.5% -9.4% -7.9% 19.9% 31.9% Operating Income 23.0 30.4 20.0% Other income – net -0.4% -69.9% (2.0) (0.6) -1.7% Finance Charges – net (8.6) (12.1) 41.9% -7.4% -7.9% Net Profit before Zakat 11.5% 41.3% 12.5 17.7 10.9% Zakat (3.0) (3.4) 13.1% -2.6% -2.2% -1.5% 432.7% Income Tax (0.4) (2.2) -0.4% Net Income 9.0 12.0 32.5% 7.8% 7.8% Earning per Share 0.2 0.3 32.5% 14

Group Initiatives Reinforce Core Gold Wholesale Perfect Integration Tous Business Franchisee Acquisition • Strong marketing to build • New Premium Collections and awareness and brand image celebrity based promotions • Enhance products assortment • Digitization to obtain sell-through • Train and develop engaged data, optimize sales and stocks female Saudi team in the shops • Develop L’azurde Miss L’ Line through our shops and 3 rd party • Expand network with top locations • Establish global E-Commerce retailers platform and CRM • Grow export • Leverage global TOUS best • Production efficiency through practices automation and 3D printing • Leverage Egypt low cost production • Reduce Working Capital 15

Group Initiatives Enhance L’azurde Retail Pursue M&A Opportunities Profitability And Shariaa Compliance • Briefed several banks • Rationalize our KSA footprint • Acquisition to focus on KSA retail • Re-invigorate operations at KSA market flagships shops • Strong global franchise brands • Strengthen KSA airports operation • Products to complement our • Reinforce our kiosks retail network current assortment at top KSA Malls • Deal accretive for shareholders • Expand our retail network in Egypt • Pursue Shariaa certification efforts and ensure the Company obtains full Shariaa compliance status 16

L’azurde, a great history, a greater future Thank You For investors relations matters please contact: investors@lazurde.com 17