presentation results q2 2019 · 2019. 8. 21. · for investors relations matters please contact:...
TRANSCRIPT
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
2. Business Model 5-7
3. Results 8-15
4. Group Key Initiatives 16-15
Pages
1. Executive Summary 4
3
Agenda
Executive Summary
• Q2 Revenues were 43% higher than same quarter of LY: In KSA, wholesale revenues
increased by 8.8% compared to the same quarter of last year, due to successful new collections
and celebrity endorsement campaign, while retail revenues witnessed a significant increase of
129.0% mainly due to consolidation of revenues of the recently acquired franchise business of
Tous and a 10% growth in L'azurde retail shops. Egypt’s revenues continued to perform strongly,
for the seventh quarter in a row, with a growth of 20.1% in the wholesale channel due to a
successful advertising campaign and strong customer uptake of new collections and in retail
channel by 64.4% compared to the same quarter of last year due to the successful opening of
seven new outlets during the last twelve months.
• Gross profit of SAR 80.8 million for the second quarter of 2019, was 44% higher than the
same quarter of last year mainly due to mainly due the significant increase in operating
revenues.
• Net income for Q2 2019 came at SAR 12.2 Million, 151% higher same quarter LY. Higher
operating revenues together with higher gross margin contributed to the significant increase in
net income.
• This is the fifth quarter in a raw with operating revenues exceeding the same quarters of
last year. Also net income in this quarter is 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’azurdeJewelry
Gold Wholesale Business
L’azurdeJewelry
Gold Wholesale Business
L’azurde Mono Brand diamond jewelry retail
L’azurde House of Brands
Gold Wholesale Business
TOUS
L’azurde retail
Kenaz Value diamonds jewelry (Kiosks)
5
L’azurde Group: House of Brands
L’azurde Business Model Evolution
L’AZURDE GROUP
Wholesale
- 18K
- 21K
Retail
L’AZURDE24 Shops
6 Duty Free
KENAZ14 Kiosks
TOUS26 Shops
6
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
L’azurde
2,000 Retailers
7
WholesaleNet Volume and Price Impact
Revenues Variance – Q2 2019 (Million SAR)
92.8
2.2 (2.2) 5.9 3.2 26.4*
4.6
132.8
50
60
70
80
90
100
110
120
130
140
Retail
8* This figure includes the revenues of the recently acquired franchise business of Tous
WholesaleNet Volume and Price Impact
Revenues Variance – H1 2019 (Million SAR)
207.8
6.0 (1.0) 12.7 7.9
42.4*
9.9
285.8
50
100
150
200
250
300
Retail
9* This figure includes the revenues of the recently acquired franchise business of Tous
10
Group Quarterly Revenues (Million SAR)
121.9
82.2 76.2 75.1
115.0
92.8
115.0
92.8 98.5 97.8
153.0
132.8
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
180.0
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Last Year Current Year
11
Group Quarterly Net Income (Million SAR)
22.0
6.4
0.5
2.6
9.0
4.8
9.0
4.8 3.7
0.1
12.0 12.2
-
5.0
10.0
15.0
20.0
25.0
Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Last Year Current Year
Retail Revenues at +112% in Q2 2019 vs. LY
12
65 74
28
58 92.8
132.8
-
20
40
60
80
100
120
140
Q2-2018 Q2-2019
Wholesale Retail
142 168
66
118 208
286
-
50
100
150
200
250
300
H1-2018 H1-2019
Wholesale Retail
+112%
+14% +18%
+80%
% of Total 58% 37% 2% 3%
Vs. 2018 41%▲ 27% ▲ 13%▼ >100% ▲
Operating Revenues by Country – H1 2019Million SAR
KSA Revenues increased by 41%
13
166.3
105.5
6.6 7.5
-10
10
30
50
70
90
110
130
150
170
190
KSA Egypt Other GCC Other Export
Retail Gross Margin +158% in Q2 - 2019 vs. LY (Million SAR)
16
99
123
25
54
124
177
-
20
40
60
80
100
120
140
160
180
H1-2018 H1-2019
Wholesale Retail
46 54
10
27
56
81
-
10
20
30
40
50
60
70
80
Q2-2018 Q2-2019
Wholesale Retail
+158%
+18% +24%
+114%
15
Group Consolidated Income Statements (Million SAR)
Q2 H1
2018A 2019A Delta 2018A 2019A Delta
Revenue 92.8 100.0% 132.8 100.0% 43.1% 207.8 100.0% 285.8 100.0% 37.5%
Cost of revenue (36.8) -39.7% (52.0) -39.2% 41.3% (83.4) -40.1% (109.1) -38.2% 30.8%
Gross Profit 56.0 60.3% 80.8 60.8% 44.3% 124.4 59.9% 176.8 61.8% 42.0%
Selling and marketing (29.4) -31.6% (40.9) -30.8% 39.2% (64.0) -30.8% (94.4) -33.0% 47.5%
General and admin (9.3) -10.0% (11.9) -8.9% 28.2% (20.0) -9.6% (23.9) -8.4% 19.2%
Operating Income 17.4 18.7% 28.0 21.1% 61.6% 40.4 19.4% 58.4 20.4% 44.7%
Other income – net (1.1) -1.2% 0.6 0.4% -153.7% (3.1) -1.5% (0.0) 0.0% -99.3%
Finance Charges – net (8.7) -9.3% (13.4) -10.1% 54.8% (17.2) -8.3% (25.6) -8.9% 48.4%
Net Profit before Zakat 7.6 8.2% 15.2 11.5% 99.8% 20.1 9.7% 32.9 11.5% 63.4%
Zakat (2.6) -2.8% (2.6) -2.0% 1.4% (5.6) -2.7% (6.1) -2.1% 7.7%
Income Tax (0.2) -0.2% (0.4) -0.3% 139.1% (0.6) -0.3% (2.7) -0.9% 344.4%
Net Income 4.8 5.2% 12.2 9.2% 150.9% 13.9 6.7% 24.1 8.4% 73.8%
Earning per Share 0.1 0.3 150.9% 0.3 0.6 73.8%
Group Initiatives
Reinforce Core Gold Wholesale
Business
• New Premium Collections and
celebrity based promotions
• Digitization to obtain sell-through
data, optimize sales and stocks
• Develop L’azurde Miss L’ Line
through our shops and 3rd party
retailers
• Grow export
• Production efficiency through
automation and 3D printing
• Leverage Egypt low cost
production
• Reduce Working Capital
Perfect Integration Tous
Franchisee Acquisition
• Strong marketing to build
awareness and brand image
• Enhance products assortment
• Train and develop engaged
female Saudi team in the shops
• Expand network with top locations
• Establish global E-Commerce
platform and CRM
• Leverage global TOUS best
practices
18
Group Initiatives
Enhance L’azurde Retail
Profitability
• Rationalize our KSA footprint
• Re-invigorate operations at KSA
flagships shops
• Strengthen KSA airports operation
• Reinforce our kiosks retail network
at top KSA Malls
• Expand our retail network in Egypt
Pursue M&A Opportunities
And Shariaa Compliance
• Briefed several banks
• Acquisition to focus on KSA retail
market
• Strong global franchise brands
• Products to complement our
current assortment
• Deal accretive for shareholders
• Pursue Shariaa certification efforts
and ensure the Company obtains
full Shariaa compliance status
19
Thank You
For investors relations matters please contact: [email protected]
L’azurde, a great history, a greater future