Rajesh Exports Limited · NSE:RAJESHEXPO
Rajesh Exports — Investor Presentation (March 2008)
38 slides from Rajesh Exports's investor presentation, March 2008
Slide 1: Rajesh Exports Limited – All that glitters is Gold
RAJESH EXPORTS LIMITED All that glitters is…… Gold March 2008 1
Slide 2: Important Notice
Important Notice This document contains selected information regarding Rajesh Exports Limited (the “Company”). It does not purport to be comprehensive or to contain all of the information that a prospective investor may desire in investigating the Company or the securities; hence each prospective
Slide 3: Contents
Contents Page No. 1 Company Overview 4 Contents 2 Jewellery Market 15 3 Growth Strategy 18 4 Recent Developments 31 5 A Quick Recap 35 3
Slide 4: Company Overview
COMPANY OVERVIEW 4
Slide 5: Snapshot
Snapshot Business Established in 1989.Head quartered at Bangalore- India. Manufacturer, wholesaler and retailer of gold jewellery Key Highlights World’s largest gold jewellery manufacturer World’s lowest cost producer of gold jewellery World’s largest catalogue of jewellery designs 12% of gem and je
Slide 6: Manufacturing Process
Manufacturing Process Production commencement….. (A) Machine Chains Gold bullion and Molten gold Further alloy heated to poured into cast processed as to produce rods (B) Manual Process 1000o C (C) Casting Process (A) Machine Chains (for standard gold chains of various designs) Wires then Wires woun
Slide 7: Manufacturing Process
Manufacturing Process (B) Manual Process (for hand-made jewelry) Wire drawing Design Design pieces Dye cutting and stamping fabrication with loose ends Soldering and Quality check polishing and delivery (C) Casted Jewellery (for plain and diamond jewellery) Metal master & Wax injection & Investment
Slide 8: Saga of Rapid Growth
Saga of Rapid Growth India’s largest 1.White jewellery Revenues labelled jewellery Year of exceed Establishment manufacturer 2. Diamond US$ 1 billion (6 tpa) studded jewellery 1989 1996 2006 1960-1989 2007-2012 1995 2003 2007 Promoters IPO of 2m shares World’s largest • 24K Retail and 3. Retailing:
Slide 9: Consistent Profitability
Consistent Profitability REVENUE AND EBITDA (US $ MLN) 1800 1702 60 1600 1354 52.9 50 1400 US$ MILLNS 1200 1049 40 1000 Revenue 28.0 30 800 EBIDTA 600 21.6 20 400 10 200 0 0 FY05 FY06 FY07 EPS & BVPS 2005-07 2.5 2.17 2 1.56 1.5 EPS USD 0.98 1 0.67 BVS 0.45 0.5 0.3 0 FY05 FY06 FY07 EPS &BVPS 9
Slide 10: Summarized Profitability Statement
Summarized Profitability Statement (In US$ million) Particulars 2004-05 2005-06 2006-07 Total Income 1048.59 1353.54 1702.06 Total Expenditure 1027.07 1326.02 1649.16 EBITDA 21.58 27.96 52.89 Interest 10.62 10.29 26.80 Depreciation 0.33 0.35 0.36 Profit before Tax 10.63 17.33 25.73 Taxation --- 0.89
Slide 11: I, II & III Quarter 2007-08 Summarised Profit Statement
I, II & III QUARTER 2007-08 SUMMARISED PROFIT STATEMENT Particulars 30th June 2007 30th Sept 2007 31st Dec 2007 (In US $ million) (In US $ million) (In US $ million) Total income 501.30 511.05 516.80 Total Expenditure 477.41 487.00 490.62 EBITDA 23.88 24.04 26.18 Interest 13.39 9.48 9.80 Depreciatio
Slide 12: Achievements & Awards
Achievements & Awards • Ranked No. 1 Investor Friendly Company in a National Survey by Business Today • The only “Premier Trading House” in Jewellery Sector in India • “Overall Excellence in the category of Gold Exports” by the “Gem & Jewellery Export Promotion Council” for 13 consecutive year • Kar
Slide 13: Ranked No. 1 Investor Friendly Company in National Survey
Rajesh Exports ranked as No. 1 Investor Friendly Company in National Survey by Business Today 13
Slide 14: Ranked India's second fastest growing company
Rajesh Exports ranked as India’s second fastest growing company 14
Slide 15: Management Team
Management Team Rajesh Mehta • Experience of over 20 years in the jewellery industry Executive Chairman • Pioneer in organising jewellery trade in India • Director, Handloom & Handicrafts Exports Promotion Corp President, Jewellery Exporters Association of Karnataka Prashant Mehta • Experience of ov
Slide 16: Jewellery Market
JEWELLERY MARKET Pu @ 16
Slide 17: World Market
World Market Current global gems and jewellery industry: US$ 85 billion (Gold demand is growing at 8-10% p.a. CAGR) Global gold market: 3,300 tonnes Major producers: South Africa, USA and Australia (45% of total output) Major consumers: India, USA (2/3 of India), China (1/3 of India) 10-year
Slide 18: Indian Market
Indian Market India is world’s largest consumer of gold: At 850 tonnes p.a. Valued at US$ 18 billion Growing at 10% pa Indian gold demand is firmly embedded in cultural and religious traditions (Stridhan) Indian gold demand (tonnes) and price (1991-2005) 18
Slide 19: Growth Strategy
GROWTH STRATEGY 19
Slide 20: Mission 2007-2012
Mission 2007-2012 Target: To increase net margin from 1½% to 10% in next 5 years Growth Trajectory: Phase I (1960-1989) Retailers with global vision, handicapped by supply constraints Phase II (1989-1994) India’s first organised jewellery manufacturer Phase III (1995-2002) India’s largest (6 t
Slide 21: Growth Engine #1 – White-labelled jewellery
Growth Engine #1 White-labelled jewellery Margin 15% Global market size: US$ 30-35 billion Target share: 2% Status: 1,300 exclusive designs developed Prototypes approved by large chain-stores across the world, White labelled jewellery sales commenced from Q1 /2007/08. Jewellery Outsourcee to
Slide 22: Growth Engine #2 – Diamond studded jewellery
Growth Engine #2 Diamond studded jewellery Margin 25% Global market size: US$ 5 billion Target share: 5% USP: Honest pricing, Global Designs and Finish Launched Harmony, Eternal, Solitaire, I-teen, Filigree, Southern, Ghazal, Aishwarya and Sushmita brands of Diamond Jewellery in the domest
Slide 23: Growth Engine #3 – Retailing
Growth Engine #3 Retailing Retailing in India (to be followed by global rollout) Margin 10%; Indian Market size: US$ 18 billion; Target share: 4% Shubh – for mass market, to replace traditional jewellers Laabh – for up-market and elite clientele Oyzterbay – for the fashion conscious ...with
Slide 24: Jewellery Retail – India
Jewellery Retail – India 96% is in unorganised sector (globally 70% is unorganised) Very highly fragmented (no pan-India stores) Over 400,000 small retailers and 850,000 goldsmiths Branded gold jewellery is a very recent phenomenon Branded jewellery accounts for only 4% of total jewellery
Slide 25: Retail Venture USP
Retail Venture USP Punch Mantra (the five doctrines) • 22K Guarantee Backed by life-time buyback guarantee • Largest Range Backed by proprietary library of 29,000 active designs • Technology Proprietary technology to ensure standardization, consistency, color, Tarnish free etc. • Competitive Pricing
Slide 26: 24K Retail
24K Retail • For sharper focus: All retailing ventures put under 100% subsidiary: 24K Retail Limited • Team (ex-Oyzterbay, ex-Titan) Pioneers in creating branded retail jewellery in India with over 50 man-years of experience • Team that created ‘super brands’ – Titan, Tanishq, Oyzterbay – are now pa
Slide 27: Shubh
Shubh Shubh means ‘auspicious’ VFM platform (Value for Money) For mass market To replace mainstream urban and rural jewellery stores Consolidation play MOU signed to acquire circa 100 existing jewelry retail stores, many under no-purchase notice, to be re-launched under “Shubh” branded retail
Slide 28: Laabh
Laabh Laabh means ‘profit’ Exquisite jewellery for up-market clientele Signature range of 3,000 individual jewellery designs Contemporary and modern designs in wide spectrum of plain gold jewelry, diamond jewelry, gold coins and solitaires To target a major share of the upcoming branded reta
Slide 29: Oyzterbay
Oyzterbay Oyzterbay – Jewellery for the Living ‘International Lifestyle’ platform – I own it! Targeted at youth and rapidly growing upwardly mobile economic strata To offer jewellery, watches, and accessories 1,200 exclusive pieces of jewellery designed for the Oyzterbay Collections To lau
Slide 30: Profile transformation (2007-2010)
Profile transformation Revenue Mix (2007-2010) (USD in million) Revenue 2007-08 Revenue 2008-09 Revenue 2009-10 Bulk 19.75 Retail 39.51 65.19 Pvt Label 119.51 59.26 86.91 167.31 Diamond 282.47 Bulk Bulk Retail Retail 549.73 Pvt Label Pvt Label Diamond 1553.58 Diamond 1738.27 1856.79 2007-08 2008-09
Slide 31: Profile transformation (2010-2012)
Profile transformation Revenue Mix (2010-2012) (USD in million) Revenue 2010-11 Revenue 2011-12 157.75 231.35 236.62 289.19 Bulk 1012.15 Bulk Retail Retail 1314.57 Pvt Label Pvt Label Diamond Diamond 920.20 1359.17 2010-11 2011-12 Description Revenue Profit Rev.share Description Revenue Profit Rev.s
Slide 32: Recent Developments
RECENT DEVELOPMENTS 32
Slide 33: Corporate Structure
Corporate Structure PARENT COMPANY RAJESH EXPORTS LIMITED Manufacturers, Exporters and Wholesalers Manufacture of Gold and Diamond Jewellery, Bulk Exports, Wholesale, White Label Branded Exports and Diamond Jewellery Exports. SUBSIDIARIES 24K RETAIL BANGALORE INFRA STORE BRANDS OYZTERBAY SHUBH LAABH
Slide 34: Bangalore Infra
Bangalore Infra To monetise land-bank owned by REL of 170,458.16 sq. ft of prime commercial space and 137 acres of land outside the city municipal zone Acquisition cost: US$ 25 million Estimated market value: US$ 200 million Post-development value: US$ 350 million Land bank, primarily in B
Slide 35: A Quick Recap
A Quick Recap 35
Slide 36: Key Points
Key Points … Gold processing Lowest cost manufacturer of gold jewellery – Most advanced technology. Stable existing volume business. USP: 22K Guarantee, Range, Technology, Pricing, Service Retail 24K Retail – Laabh, Shubh, and Oyzterbay Real Estate Bangalore Infra to monetize land bank Operational E
Slide 37: Market Snapshot
Market Snapshot Market Price per share (as on 30 July, 2007) US$ 3.00 Shareholding Pattern Shares Outstanding 250.61 million Market Capitalisation US$ 751.83 million P rivate Others Corporate Bank Balances* US$ 1441.16 million 3.64% Bodies (as at 31 March 2006) 7.41% Total Debt** FIIs/ Banks/ US$ 22
Slide 38: Thank You!
Thank You! Rajesh Mehta (Executive Chairman) Rajesh Exports Limited (Registered Office) (Corporate Office) No. 4, Batavia Chambers, No.1 Brunton Road, Kumara Krupa Road, Bangalore-560001 Kumara Park (East), INDIA. Bangalore – 560001, INDIA. Tel: +91 (80) 40239999 Tel: + 91 (80) 2226 6735 Fax: +91 (8