Presentation Results Q3 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. Group Key Initiatives 8-12 4. Results 13-20 3
Executive Summary Q3 Operating Revenues were 11% higher than same quarter of LY . In KSA, Retail channel • revenues increased by 78% mainly due to the recently acquired TOUS franchisee. Wholesale KSA revenues decreased by 44% compared to the same quarter last year due to high volatility in the gold price during this period which led to a temporary delay in buying decisions by our retailers and a very long summer break. • Egypt’s revenues continued to perform strongly , for the eighth quarter in a row, with a growth of 19% in the wholesale channel due to successful advertising campaigns and strong customer uptake of new collections. The retail channel revenues grew by 24.5% compared to the same quarter of last year due to the sales increase in existing shops and the successful opening of four new outlets. This is the sixth quarter in a row with operating revenues exceeding the same quarter of • last year. Net income for Q3 2019 came at SAR 0.2 Million, 93% lower than same quarter LY due to • due to lower revenues in KSA wholesale. YTD net income is at SAR24.4 Million, up +38.6% versus same period last year. The Company has a major growth initiative with the new Miss L’ line offering affordable • Gold fashion jewelry at high Gross Margin and low Working Capital sold through 3 rd party retailers in Malls. We undertake a significant repositioning in Q4 where we will restructure the core Gold • wholesale business at much lower costs and Working Capital while securing the right resources on growing more efficient businesses like TOUS, Miss L’ and E -commerce. 4
L’azurde Business Model Evolution L’azurde House of Key Brands Gold Wholesale Business L’azurde Jewelry TOUS Gold Wholesale Business L’azurde retail L’azurde Jewelry L’azurde Mono Brand Miss L’ Gold Wholesale diamond jewelry retail Business Kenaz Value Diamonds jewelry (Kiosks) 5
L’azurde Business Model Evolution L’AZURDE GROUP Wholesale Retail Miss L’ L’AZURDE - 18K TOUS KENAZ Malls Wholesale 20 Locations and Direct Retail - 21K 26 Locations 12 Locations 7 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 1,500 Retailers Quarterly Gold Audit with Auditors rotation 7
New Miss L’ High Potential Line High GM and Low Working Capital 8
New Miss L’ High Potential Line Wholesale Business at Malls E-Commerce Advertising Banners Standing Displays 3 rd Party Retailers in Malls 9
L’azurde Wholesale Business Model Evolution Traditional Gold New Miss L’ Fashion Souks Wholesale Jewelry Wholesale Business Business Gold Souks Malls Sold by weight Sold by piece High WC Very low WC AR at 90-120 days AR at 60 days Major E-Commerce Limited E-Commerce opportunity If we shift 10% of the current wholesale volume sales to Miss L’, GM and NI can increase by SAR 50m and SAR 40m respectively 10
Group Initiatives Reinforce Core Gold Wholesale Grow Miss L’ Business • Drive the promising Miss L’ affordable • Improve design capabilities and leverage technology and 3D printing to produce gold jewelry fashion line distribution differentiated products at lower weight through 3rd party retailers, own stores • Leverage product tracking technologies and e-commerce for better measurement of sales, faster • Develop a regional and global replenishment to our retailers and lower distribution channel for Miss L’ products working capital • Launch top designs: essentials, classic • Restructure the business model to run at and fashion jewelry at affordable prices lower operating costs and improve • Leverage latest consumer and fashion manufacturing productivity jewelry trends: gifting and lighter jewelry • Reduce working capital through shorter • Enhance Gross Margins through mix and payment terms and lower inventories premium pricing for products endorsed levels by celebrities 11
Group Initiatives Perfect Integration Tous Franchisee Enhance L’azurde Retail Profitability Acquisition • Develop our profitable L’azurde retail • Optimize the newly acquired TOUS franchisee business in KSA business in Egypt • Strong marketing to build awareness • Improve the profitability of the L’azurde and brand image retail business in KSA by rationalizing our • Enhance products assortment footprint and re-invigorating our flagship shops • Train and develop engaged female Saudi team in the shops • Expand our exclusive airports retail • Expand network with top locations operations • Establish global E-Commerce platform • Enhance products mix to raise Life Like and CRM sales through cross selling • Invest in staff training to raise • Leverage global TOUS best practices productivity 12
Revenues Variance – Q3 2019 (Million SAR) 120 110 2.9 100 90 14.6 (4.2) 7.1 (9.5) 80 109.4 98.5 70 60 50 Wholesale Retail Net Volume and Price Impact 13
Revenues Variance – YTD Sep 2019 (Million SAR) 450 400 350 12.8 56.9 300 2.8 19.8 (3.5) 250 200 395.2 306.3 150 100 50 Wholesale Retail Net Volume and Price Impact 14
Group Quarterly Revenues (Million SAR) 180.0 153.0 160.0 132.8 140.0 121.9 115.0 115.0 120.0 109.4 100.1 98.5 98.5 100.0 92.8 92.8 82.2 76.2 75.1 80.0 60.0 40.0 20.0 - Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Previous Year Current Year 15
Group Quarterly Operating Income (Million SAR) 40.0 34.8 35.0 30.4 30.0 28.0 25.0 23.0 23.0 20.0 17.4 17.4 15.8 15.8 15.7 14.0 13.8 15.0 13.2 10.7 10.0 5.0 - Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Previous Year Current Year 16
KSA Revenues increased by 33% Operating Revenues by Country – YTD Sep 2019 Million SAR 240 215.0 190 164.6 140 90 40 8.1 7.4 -10 KSA Egypt Other GCC Other Export % of Total 54% 42% 2% 2% Vs. 2018 33% ▲ 25% ▲ 27% ▼ >100% ▲ 17
Retail Revenues at +57% in Q3 2019 vs. LY 109 395 400 99 100 350 306 166 48 +72% +57% 31 300 80 96 250 60 200 150 40 -10% +9% 68 229 61 210 100 20 50 - - Q3-2018 Q3-2019 YTD Sep-2018 YTD Sep-2019 Wholesale Retail Wholesale Retail 18
Retail Gross Margin +93% in Q3 - 2019 vs. LY (Million SAR) 242 70 250 66 59 60 +108% 75 200 21 +93% 183 11 50 36 150 40 30 100 -7% 48 168 +14% 45 147 20 50 10 - - Q3-2018 Q3-2019 YTD Sep-2018 YTD Sep-2019 Wholesale Retail Wholesale Retail 19
Group Consolidated Income Statements (Million SAR) Q3 YTD Sep 2018A 2019A Delta 2018A 2019A Delta Revenue 98.5 109.4 100.0% 11.0% 306.3 395.2 100.0% 29.0% 100.0% 100.0% Cost of revenue -40.0% 10.2% -38.7% 24.1% (39.8) (43.8) (123.1) (152.9) -40.4% -40.2% Gross Profit 61.3% 32.3% 58.8 65.6 11.6% 183.2 242.3 59.6% 60.0% 59.8% -39.9% 33.9% -34.9% 42.9% Selling and marketing (32.6) (43.7) (96.6) (138.1) -33.1% -31.5% General and admin (10.4) (8.7) -15.9% (30.4) (32.6) 7.2% -10.5% -8.0% -9.9% -8.3% 12.1% -16.4% 18.1% 27.5% Operating Income 15.8 13.2 56.2 71.6 16.0% 18.3% Other income – net (0.4) 3.1 >100% (3.5) 3.1 >100% -0.4% 2.8% -1.1% 0.8% -11.7% 42.9% Finance Charges – net (9.0) (12.8) (26.2) (38.4) 46.5% -9.1% -8.6% -9.7% Net Profit before Zakat 6.4 3.5 -45.9% 26.5 36.3 37.0% 6.5% 3.2% 8.7% 9.2% Zakat (2.6) (2.5) -5.3% (8.2) (8.5) 3.6% -2.6% -2.3% -2.7% -2.2% Income Tax -0.9% >100% (0.1) (0.8) >100% (0.7) (3.4) -0.1% -0.7% -0.2% Net Income 3.7 0.2 -93.7% 17.6 24.4 38.6% 3.8% 0.2% 5.7% 6.2% Earning per Share 0.1 0.0 -93.7% 0.4 0.6 38.6% 20
Recommend
More recommend
