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,” “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. TITAN
Silver Jubilee: The Journey 2011 : Mia 2009 : Helios 2007 : Eyewear 2010 : Fastrack 2006 : GoldPlus 2008 : Zoya Accessories 2005 : Precision Engineering (PED) 2003 : Fastrack 1998 : Sonata Launch 1996 : Tanishq 1994 : Timex JV 1993 : Europe Foray 1987 1987: Launch of Titan watches 1984 : Conceived TITAN
Our Brands Luxury Premium Mid Market Mass Market TITAN
India’s largest specialty retailer Luxury 2 32 Premium 348 Mid Market 209 134 726 Service Centres 122 Mass Market 32 879 exclusive stores 166 Towns Over a million sft of retail space TITAN
International presence Kuwait - 41 Iran- 41 Nepal - 45 Pakistan- 32 Qatar - 58 Brunei- 10 Bahrain - 60 Bangladesh - 135 Saudi Arabia - 642 Thailand- 66 Ghana - 5 Vietnam- 133 Nigeria- 10 Malaysia- 158 Sri Lanka- 74 Ethiopia – 11 Singapore - 77 Djibouti - 1 Uganda - 15 UAE- 146 Oman - 134 Kenya - 23 Mauritius- 17 Fiji- 4 Yemen - 15 Maldives - 15 31 Countries 2,160 outlets TITAN
Where we stand today • World’s 5 th 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 TITAN
Watches Division TITAN
Watches Four major brands • Sold through • Exclusive “World of Titan” outlets – “Fastrack” outlets – Multi- brand outlets “Helios” – Roorkee Pantnagar Multi-brand dealers and stores – • Dehradun Large- format stores like Shoppers’ Stop, Lifestyle, – etc. Large network of exclusive service centers • Sophisticated Design & Development • Center Manufacturing & Assembly Goa Core strength in Industrial, Retail and Graphic design – facilities Numerous international award-winning designs to its – • Hosur credit TITAN
Watches – Distribution • 11,000 dealers Retail All India • 2,500 towns • 348 showrooms (11 added in Q2) World of Titan • 139 towns – 355k Sft • 122 stores / kiosks (12 added in Q2) Fastrack • 57 towns – 61k sft • 32 stores (7 added in Q2) Helios • 13 towns – 50k sft • 726 outlets Service Centres • 266 towns • 2,160 outlets International • 31 countries TITAN
Jewellery Division 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. TITAN
Jewellery – Distribution • 136 stores including 2 Zoya stores (2 added in Q2) Tanishq • 455k sft (34k sft added in Q2) • 81 towns • 32 stores GoldPlus • 67k sft • 32 towns TITAN
Eyewear & Precision Engineering 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 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 TITAN
Q2 Performance 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 TITAN
Q2 - Retail growth Sales value Like to like growth 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% TITAN
Company performance Q2 Performance YTD Performance 2,500 5,000 2,258 4,433 4,500 2,061 4,065 2,000 4,000 3,500 Rs Crores Rs Crores 1,500 3,000 2,500 1,000 2,000 1,500 500 1,000 248 460 210 180 407 336 153 500 297 0 0 Net Sales PBT PAT Net Sales PBT PAT FY11-12 FY12-13 Q2 FY11-12 Q2 FY12-13 • Revenue growth at 10% ; lower demand • Revenue growth : 9% due to high gold prices and slowdown in • PBT growth : 13% economy • PAT growth : 13% • PBT growth of 18% possible due to better Jewellery margins • PAT growth : 18% TITAN
Watches Q2 Performance YTD Performance 900 500 472 832 450 800 417 733 400 700 350 600 Rs Crores Rs Crores 300 500 250 400 200 300 150 200 100 67 115 105 55 100 50 0 - Net Sales PBIT Net Sales PBIT Q2 FY11-12 Q2 FY12-13 FY11-12 FY12-13 • Volume growth of 4% despite economic • Volume growth : 1% slowdown • Revenue growth : 14% • Revenue growth of 13% - impact of price • Margin decline and higher overheads increases over the last one year result in PBT decline • Margin affected by excise duty hike, and higher material costs and overheads TITAN
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