Vaibhav Global Limited - Global Retailer of Fashion Jewelry, Accessories and Lifestyle products on Home Shopping TV and e-Commerce Platforms
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Global Retailer of Fashion Jewelry, Accessories and Lifestyle products on Home Shopping TV and Vaibhav Global Limited e-Commerce Platforms Financial Results Presentation – Q3 & 9M FY2019
Certain statements in this document may be forward-looking statements. Such forward-looking statements are
subject to certain risks and uncertainties like regulatory changes, local political or economic developments, and
many other factors that could cause our actual results to differ materially from those contemplated by the relevant
forward-looking statements.
Vaibhav Global Limited will not be in any way responsible for any action taken based on such statements and
undertakes no obligation to publicly update these forward looking statements to reflect subsequent events or
circumstances.
Investor Presentation Q3 FY2019 2
B2C Success in Developed Markets
Products Sold TV Homes Avg. Quantity per Customer
On TV and Web Directly Accessed (FTE) *TTM
Unique Customers *TTM ROE *TTM ROCE *TTM
Revenue PAT Free Cash Flow
Investor Presentation Q3 FY2019 3
100 million (FTE) households on TV
shopping in the US and UK; expanding
End-to-end B2C business model for online presence
Vertically-
fashion and lifestyle accessories Shop LC and Positive customer engagement metrics –
Proprietary TV home-shopping and
integrated
TJC are brands customer base, retention rate, repeat
e-commerce platforms fashion retailer
with strong purchases
on electronic
customer
retail platforms
visibility
Professional, experienced Sizeable B2C franchise in
management team having in- developed markets – unique
depth knowledge and industry Strong achievement for an Indian
experience Robust customer Company
management
engagement
Talent pool across marketing, team Growing recognition of deep
merchandising, operations, value fashion products enables
technical and strategy functions scaling to adjacent categories
Investments in customer interface, Solid Hybrid supply Established and efficient manufacturing
production, warehousing facilities, chain operations in Jaipur, India
infrastructure
supply chain and CRM infrastructure Outsourcing from China, Thailand,
backbone
Scalable model with limited capex Indonesia and India; aggressive trend
requirement spotting initiatives
Investor Presentation Q3 FY2019 4
Manufacturing and
Consumption Markets Souring Markets
STS, China
Sourcing
USA STS Hong Kong
TV channel retail Sourcing
E-commerce website The Jewellery Channel, UK Sub-contracting
& Apps
TV channel retail
Marketplaces
E-commerce website & Apps
Marketplaces STS Thailand
Sourcing
USA
VGL India
B2B Wholesale distribution
Group HQ
Gemstones & jewelry
manufacturing STS Bali
Sourcing Sourcing
Product Development
Investor Presentation Q3 FY2019 5
Table of Contents
Q3 & 9M FY19 Financial Business
Financial 07 Performance 15 Background 23
Performance Trends Details
Investor Presentation Q3 FY2019 6
Q3 & 9M FY19
Financial
Performance
Key Highlights for Q3 FY19
Home TV Network Reach – 100 Mn Households across US and UK Operating Highlights in Q3 & 9M FY19
100 million households on full time equivalent (FTE*) basis Driving forward on its quality journey, Shop LC is preparing to apply
75 million households in the US for the Malcolm Baldridge Progress Level Award from Quality Texas
25 million households in the UK Foundation after receiving recognition for the Malcolm Baldrige
Commitment Level Award.
Q3 FY19 Retail Volumes at 2.9 Million Units, up 18% YoY and overall With the objective of diversifying its revenue profile, Shop LC is
ASP* at $23.43, down 5% YoY implementing entire days dedicated to non-jewelry products –
resulting in new customer addition, lower sales returns and ASP.
Home TV shopping volumes at 1.92 million units
Web shopping volumes at 0.99 million units Shop LC launched Fulfillment by Amazon (FBA) Marketplace, enabling
placement of select inventory at Amazon Fulfillment Centers, which
Strong volume growth on both platforms
raises brand awareness with customers converting from Amazon to
Deep customer engagement drives strong repeat purchases Shop LC at a low acquisition cost.
TJC focused on better customer targeting through additional slots and
Q3 FY19 – Financial Performance better channel positioning.
Total Revenue at Rs. 511 crore, up 11% YoY Shop LC expanded studio operations, adding remote broadcasting
B2C* Retail revenue up 23% YoY capability to support HD programming.
EBITDA at Rs. 71 crore, up 15% YoY 75,000 units were sold on Shop LC’s Birthday Bash along with
PAT at Rs. 53 crore, up 15% YoY ongoing support to the One for One program.
Great Place to Work Institute named VGL’s China subsidiary STS
Gems among Greater China’s Best Companies to Work For 2018 for
the third consecutive year. Key operating entities within the group are
receiving greater recognition under the GPTW program.
*ASP = Average Selling Price; B2C = Business to Consumer; FTE = Full Time Equivalent Investor Presentation Q3 FY2019 8
“I am happy to share that Q3FY19 has been a milestone quarter for VGL where
Chairman’s Message revenues exceeded Rs. 500 crore and profits exceeded Rs. 50 crore. We have
delivered a strong performance on all key matrices during the holiday season. We
sold close to three million units on our symbiotic omni-channel sales model that
Commenting on Q3 & 9M FY19 performance, comprises TV and Web platforms backed by strong demand for our fashion jewelry
Mr. Sunil Agrawal, Chairman and Managing and fashion accessories in both, the US and the UK. On constant currency basis,
Director, Vaibhav Global said: retail growth was 10% in the US and 25% in the UK, largely driven by strong
volumes.
Retail revenues in INR terms expanded 23% during the quarter and 22% in the
first nine months. Gross margin expanded significantly to 64%, driven by higher
contribution from retail revenues. Our operating and net margins also marked an
improvement on a y-o-y basis. During the quarter, we undertook various measures
towards improving operational efficiency and customer satisfaction metrics. We
expanded non-jewelry contribution to sales by dedicating more TV program time
and expanded our presence on Amazon. We expect these initiatives to keep our
margins at elevated levels over the coming quarters. Sustaining strong returns on
capital, VGL reported ROE and ROCE at 23% and 37% respectively. Free cash
flow, during the first 9 months period, was Rs. 158 crore.
I am pleased to share that, during the quarter, we moved forward on our pursuit of
quality under the Malcolm Baldrige National Quality Award program. We also saw
growing recognition on our employee engagement/satisfaction initiatives under the
Great Places to Work survey, with meaningful progress across regions.
We are focused on delivering joy across our entire ecosystem – our customers,
employees, vendors, communities and shareholders. Success on this front should
allow us to create long term value in the enterprise.”
Investor Presentation Q3 FY2019 9
Financials – Q3 & 9M FY19 Performance
(Revenue Breakdown – Rs. crore)
Revenue Jewelry & Lifestyle Products
1,352
1,147
TV Sales Web Sales B2B
874 357 134
122
740 273
462 511
67
335 148
282 111
28
Q3 Q3 9M 9M Q3 Q3 9M 9M Q3 Q3 9M 9M Q3 Q3 9M 9M
FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19
Investor Presentation Q3 FY2019 10Financials – Q3 & 9M FY19 Performance
(Revenue Breakdown - Local Currency)
Shop LC (USD million) TJC UK (GBP million)
126.0
116.1 38.8
30.7
44.5 48.8 15.2
12.2
Q3 FY18 Q3 FY19 9M FY18 9M FY19 Q3 FY18 Q3 FY19 9M FY18 9M FY19
Investor Presentation Q3 FY2019 11Retail Performance Trends – Q3 & 9M FY19
(Volume and ASP)
TV Sales Sales Volume ('000s) Average Selling Price US$
4,778 26.1 26.3 26.3
4,342
24.6
1,666 1,919
Q3 FY18 Q3 FY19 9M FY18 9M FY19 Q3 FY18 Q3 FY19 9M FY18 9M FY19
Web Sales Sales Volume ('000s) Average Selling Price US$
2,505 21.5
2,086 21.2
992 20.5
792 20.2
Q3 FY18 Q3 FY19 9M FY18 9M FY19 Q3 FY18 Q3 FY19 9M FY18 9M FY19
Investor Presentation Q3 FY2019 12Financials – Q3 & 9M FY19 Performance
(Margins)
Gross Profit Gross Margin (%)
Gross Profit Gross Margin (%)
62.4%
64.0%
57.4% 61.2%
265 327 702 844
Q3 FY18 Q3 FY19 9M FY18 9M FY19
EBITDA EBITDA Margin (%) EBITDA EBITDA Margin (%)
13.9% 12.6%
10.3%
13.4%
62 71 118 171
Q3 FY18 Q3 FY19 9M FY18 9M FY19
Investor Presentation Q3 FY2019 13Financials – Q3 & 9M FY19 Performance
(Profits)
PAT PAT Margin (%) PAT PAT Margin (%)
10.3%
8.9%
9.9% 7.0%
46 53 81 122
Q3 FY18 Q3 FY19 9M FY18 9M FY19
EPS (Rs.)
37.33
24.75
13.99 16.11
Q3 FY18 Q3 FY19 9M FY18 9M FY19
Investor Presentation Q3 FY2019 14Financial
Performance
TrendsFinancials Performance Trends
(Revenue breakdown - Rs. crore)
Revenue
1,436 1,569
1,276 1,352
1,147
FY16 FY17 FY18 9M FY18 9M FY19
Jewelry & Lifestyle Products
TV Sales Web Sales B2B Sales
372 357
931 972 996 274 273 190 201
874 223
740 134
122 122
FY16 FY17 FY18 9M FY18 9M FY19 FY16 FY17 FY18 9M FY18 9M FY19 FY16 FY17 FY18 9M FY18 9M FY19
*Previous years numbers have been re-grouped to align with Ind AS 115. Investor Presentation Q3 FY2019 16Retail Performance Trends
TV Sales Sales Volume ('000s) Average Selling Price US$
5,854 5,877 5,737 26.9
4,778 26.3 26.3
4,342
24.9
24.4
FY16 FY17 FY18 9M FY18 9M FY19 FY16 FY17 FY18 9M FY18 9M FY19
Web Sales Sales Volume ('000s) Average Selling Price US$
2,840
2,353 2,505 20.3 20.2 20.5
2,264 2,086 17.5
15.1
FY16 FY17 FY18 9M FY18 9M FY19 FY16 FY17 FY18 9M FY18 9M FY19
Investor Presentation Q3 FY2019 17Financials Performance Trends
(Margins)
Gross Profit Gross Margin (%)
60% 59% 62.4%
63% 61.2%
804 865 929 702 844
FY16 FY17 FY18 9M FY18 9M FY19
EBITDA EBITDA Margin (%)
12.6%
10%
7% 10.3%
6%
75 102 159 118 171
FY16 FY17 FY18 9M FY18 9M FY19
Investor Presentation Q3 FY2019 18Financials Performance Trends
(Profits)
PAT PAT Margin (%)
7% 8.9%
7.0%
4%
3%
40 65 113 81 122
FY16 FY17 FY18 9M FY18 9M FY19
EPS
12.27 19.85 34.55 24.75 37.33
FY16 FY17 FY18 9M FY18 9M FY19
Investor Presentation Q3 FY2019 19Financial Performance Trends
(Balance Sheet - Rs. crore)
Shareholders’ Equity Fixed assets including intangibles
129
662 126
550
434 120
379
114
FY16 FY17 FY18 9M FY19 FY16 FY17 FY18 9M FY19
Net Debt Net Current Assets
55 417 394
6 305 314
(13)
(154)
FY16 FY17 FY18 9M FY19 FY16 FY17 FY18 9M FY19
Investor Presentation Q3 FY2019 20Financial Performance Trends
(Cash Flow – Rs. crore)
Operating Cash flow Free Cash Flow
171 158
88 76 58 73
36 18
(10) (59)
FY16 FY17 FY18 Q3 FY19 9M FY19 FY16 FY17 FY18 Q3 FY19 9M FY19
Operating Cash Flow: PBT+ Depreciation- Free Cash Flow: Operating Cash Flow – Capital
(Changes in working capital) + adjustment for non expenditure
cash items
Note: Interest charges have been deducted and
Interest income have been added while calculating
operating cash flow.
Investor Presentation Q3 FY2019 21Financial Performance Trends
(Key Ratios)
ROE ROCE
23% 37%
21%
15% 25%
11% 16%
12%
FY16 FY17 FY18 9M FY19 FY16 FY17 FY18 9M FY19
Investor Presentation Q3 FY2019 22Business Background Details
Product Profile
FASHION JEWELLERY FASHION ACCESSORIES LIFESTYLE PRODUCTS
Bracelets Watches Home Décor
Bangles Handbags Bed linens
Earrings Scarves, etc. Pillow Covers
Studded jewelry, etc. Beauty products
Investor Presentation Q3 FY2019 24Branding Initiative
Developing new brands and brand ambassadors for live presentation of BRANDS
Investor Presentation Q3 FY2019 25Sourcing
Global supply chain capability of 12 million pieces, continuously expanding
China:
Guangzhou, Haifeng,
India: Hauadu Shenzhen, In-House designers & craftsmen
Noida, Jaipur, Dongguan, Zhuji, Sourcing from appropriate
Nagaland, Kashmir Wenzhou, Wuzhou, No middlemen micro-markets in China/Asia
Yiwu, Hunan, Hong Access to latest manufacturing technology
Kong
Scale Flexibility Focus on best price to
customer through bottom
Low Investment price discovery
Thailand:
Bangkok, Chang Mai, Rapid turnaround
Mae Sai, Mapping Latest Fashion
Kanchanaburi, Vendor evaluation process
Chanthburi Competitive Pricing
Indonesia:
Assessing value perception –
Bali, Yogyakarta, Sumatra, design / fashion trend / price
Madura Surabaya in target markets
Investor Presentation Q3 FY2019 26Manufacturing
Four ISO 9001:2008 facilities in Jaipur, with capacity of
producing 6 million units annually
Commenced operations at new 100,000 sq. ft., fully-integrated,
LEED certified ‘Gold Level’ building at SEZ, Jaipur
Diamond manufacturing and sourcing unit of the company is also
present in Mumbai
Over 2,800 people in India across corporate, manufacturing,
design, sales & marketing, customer service, logistics etc.
Low-Cost operations with one of the lowest levels of wastages in
the industry
Investor Presentation Q3 FY2019 27TV Networks – USA
(Consumption Markets)
Shop LC, USA
75 million households shopping (FTE, out of 120 mn)
Based out of Austin, Texas USA
Almost 500 people in sales & marketing, customer service, logistics, TV
production, e-commerce and support functions
Successfully re-branded Liquidation Channel to Shop LC
‘Deep Discount’, Auction based retail model
Expert hosts attract and engage customers, driving repeat sales
Improved product presentation by investing in new Studio facility
New warehouse facility operationalized
Investor Presentation Q3 FY2019 28TV Networks – UK
(Consumption Markets)
The Jewellery Channel (TJC), United Kingdom
25 million households shopping(FTE, out of 25 mn)
Based out of London
Over 150 people in sales & marketing, customer service, logistics, TV
production, e-commerce and support functions
State-of-the-art auction/scheduling system; Launching Budget Pay
Targeted behavioural marketing through IBM Unica platform
TjC live stream available on multiple platforms like Youtube, Facebook
Long standing relations with TV distributors such as SKY, Virgin, FreeView
etc.
Investor Presentation Q3 FY2019 29E-Commerce
(Consumption Markets)
E-commerce presence in our chosen retail markets…
www.ShopLC.com USA
Launched Mobile App for Shop LC
Launched Budget Pay EMI option
Better website optimization on mobile devices
Migration of Web Hosting to Amazon Web Services
Enhanced customer engagement on all social platforms;
targeted marketing
www.TjC.co.uk UK
Launched Budget Pay EMI option
Launched Mobile App for TjC USA UK
Retail Format
• Rising Auction • Rising Auction
Latest DemandWare Platform
• Catalogue Price • Live TV
Better Website optimization for all devices • Collections • Web Exclusive
Enhanced customer engagement • Live TV • Sale
Europe delivery started through E-commerce platform • Clearance • Outlet
Engaging customers through different sales channels like
Facebook Shop, Ebay store etc. Investor Presentation Q3 FY2019 30Early Adopters And Cord Cutters
High Definition And Ip Expansion Into Over The Smart Tv And Streaming
Broadcast Air Presence (Ota) Devices (Iptv)
High Definition Cord Cutters don’t We already have
Broadcast want to pay for any presence on
o Charter channel or satellite following Smart
Communication fees, the can catch TV’s:
o AT&T the feed directly via o Samsung SMART
Adoption of new antenna TV
technology of We are already o LG Smart TV
Broadcasting present part time in o Android TV
o Reducing
some Areas We also have apps
dependency on on streaming devices
o ROKU
Infrastructure
o Google
o Minimizing
downtime as IP Chromecast
o Amazon Fire HD
would broadcast
it via internet
Investor Presentation Q3 FY2019 31Management Team
Mr. Sunil Agrawal Puru Aggarwal
Chairman & Managing Director Group CFO
An MBA from Columbia University, NY (USA), Sunil Over 25 years of rich experience in business modeling,
established Vaibhav in 1980 as a first generation financial strategy & planning, business development,
entrepreneur and has led the company’s transition into a procurement, supply chain & distribution, budgeting, taxation,
leading brand for fashion jewelry and lifestyle accessories cost control, legal compliances and mergers & acquisitions
Travels extensively across the world, overseeing operations, Previously worked with Teva Pharmaceuticals India as
sourcing raw material globally and representing the company Director & Country CFO for 11 years. Has also worked with
at major trade shows and jewelry fairs in the US, Europe and Coca-Cola India and E&Y India
Asia
Kevin Lyons
President- Shop LC, USA
Over 20 years of strong expertise and a proven track record
in delivering Omni channel growth in retail and e-commerce
Previously Senior Vice President of E-Commerce with HH
Gregg inc., a $2 bn, 227 store chain
Also worked with leading retailers such as Sears and Best Buy
in areas like Operations, Merchandising, Loss Prevention,
Customer Driven Supply Chain, Customer Centricity and
Channel/New Business Innovation
Investor Presentation Q3 FY2019 32Management Team
Jeff Allar Raj Singh
Group Senior Vice President, HR Vice President, Supply Chain, VGL Group
Over 30 years of work experience at major international Mr. Raj Singh is a graduate in Chemistry and trained in
companies including IBM, Unilever and the Stonyfield Farm Mechanical Maintenance. He began his career with Shrenuj &
unit of Groupe Danone Company Ltd. In his career of over 22 years, he has gone
Tremendous Organization development and senior level HR strength to strength improving and innovating businesses. His
experience having worked with brands like ACS, Stonyfield initiatives like Gems Studded Stainless Steel Jewellery, Ion
and Good Humor – Breyers Ice Cream Plating, etc., are ground-breaking in the Jewellery industry.
For an industry that is type cast as labor intensive, Mr. Singh
has led many automation drives and is successful in grinding
out cost efficiencies.
Vineet Vashist
Group Chief Technology Officer
Previously worked with Aritzia, a leader in women's fashion in
Canada, as Director of E-Commerce Technology.
Prior to Artiza, worked at various roles with Abercrombie &
Fitch (A&F) for 8 years, his last role was Director IT
eCommerce
Managed a portfolio with an annual budget of over $20
million to deliver new strategic capabilities and operational
enhancements to Aritzia and A&F.
Investor Presentation Q3 FY2019 33Management Team
Amit Agarwal Vivek Jain
Managing Director – TJC, UK Senior Director, Finance – VGL Group
MBA marketing with over 16 years of experience with A Chartered Accountant with over 16 years’ experience in
different companies like BSL Ltd , Siddhartha Marble and Finance, Banking, Accounts, Budgeting, MIS, Taxation, Costing,
VGL group in Sales and product merchandising in Jewellery Internal Audit, Systems Implementation, Company Secretarial
and Textile category . and Legal mattersPart of core team that successfully
Managing product merchandising , planning for TV and E-com implemented organizational turnaround strategies
platform along with handling retail sales at TJC UK. Appointed TJC UK Finance Director in September 2016
Part of core team who successfully launched life style responsible for both the finance function and a number of
category and turnaround TV retail sales growth in last few operational functions including Content Distribution, Customer
years Solutions and Fulfilment through a period of significant growth
and change
Pushpendra Singh
Vice President , Human Resources, Asia
Over 19 years of experience in HR with a range of Indian
companies such as NTPC, Jindal Steel and Power, Kalpataru
and Reliance Communications, successfully implementing many
talent acquisition, management and retention initiatives
Investor Presentation Q3 FY2019 34Contact Information
For more information on Puru Aggarwal Vaibhav Global Limited
Vaibhav Global Limited, +91-141-2770648
Dipti Rajput
please contact: Puru.Aggarwal@vglgroup.com
Dipti.Rajput@vglgroup.com
Shiv Muttoo CDR India
+91 22 6645 1207/1220
Karl Kolah
shiv@cdr-india.com
karl@cdr-india.com
Investor Presentation Q3 FY2019 35Thank You
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