Gemfields Group Limited · JSE:GML
Gemfields — Marketing and Fabergé webinar (July 2020)
133 slides from Gemfields's conference presentation, Jul 22, 2020
Slide 1: Mining and Marketing
MINING AND MARKETING GEMFIELDS’ MINE AND MARKET APPROACH GEMFIELDS’ OWNERSHIP OF FABERGÉ: PROS AND CONS JULY 2020 Responsibly sourced Zambian emeralds and Mozambican rubies. Championing transparency and trust in the coloured gemstone industry. A Story in Every Gemstone | Discover more about Gemfield
Slide 2: Important Notice & Disclaimer
Important Notice & Disclaimer This document, which has been compiled by Gemfields Group Limited (the “Company”), comprises written materials and information regarding the Company, including its business, results of operations and possible prospects. This document does not constitute or form part of
Slide 3: Agenda
AGENDA 1. Welcome & Introduction 2. Gemfields as a ‘mining and marketing’ business: the importance of gemstone marketing 3. The pros & cons of Gemfields’ ownership of Fabergé 4. Comments, Questions & Answers Today’s Speakers a. Emily Dungey (joined Jan 2018) • Marketing & Communications Director, Ge
Slide 4: Mine to Market vs Mine and Market
GEMFIELDS’ Approach OCCASSIONALLY MISUNDERSTOOD “MINE TO MARKET”: • Gemfields is not pursuing a vertically integrated model or strategy. • Gemfields does no cutting & polishing (ceased in 2009). • ALL mined gems are sold in the rough form at auctions (save for low grade emerald and beryl which is so
Slide 5: The De Beers case study: intentions
The De Beers case study: intentions WINNING OVER CONSUMERS AND DOMINATING THE JEWELLERY MARKET Through history, coloured gemstones have been chosen for significant pieces of jewellery. As times evolved, the most significant jewellery purchase in most people’s lives became the engagement ring. De Bee
Slide 6: The De Beers case study: approach
The De Beers case study: approach MULTIFACETED MARKETING DIRECT TO CONSUMERS The second phase took a multifaceted approach: 1. Educate: educate the public about the 4 Cs. Every one of De Beers' ads featured an educational tip called, "How to Buy a Diamond." 2. Influence: 1. Movie idols were given di
Slide 7: The De Beers case study: cost and outcomes
The De Beers case study: cost and outcomes THE COST OF MAGNITUDINAL CHANGE IN CONSUMER BEHAVIOUR The sales of diamonds in the United States rose from USD 23 million to USD 2.1 billion between 1939 and 1979. The cost of advertising rose from USD 200,000 to USD 10 million a year. In 2017, Forbes repor
Slide 8: Changes in the jewellery industry
Changes in the jewellery industry MOVING AWAY FROM THE DIAMOND ENGAGEMENT RING MONOPOLY And yet…. the market is changing and there is an increasing opportunity for coloured gemstones. 1. The rise in self-gifting; 2. Increasing spending power of women; 3. Changing attitudes to marriage, new demonstra
Slide 9: The rise in self-gifting jewellery
The rise in self-gifting jewellery MOVING AWAY FROM THE DIAMOND ENGAGEMENT RING MONOPOLY “As women have become increasingly independent, so have their shopping “Around 80% of our sales habits,” says jewellery designer Diane are women buying for Kordas. “When I started my line, I themselves,” says Ka
Slide 10: Gemfields' research into the Chinese market
Gemfields’ research into the Chinese market UNTAPPED POTENTIAL IN A GROWING MARKET China’s middle-income households are increasing in wealth, and it is customary for couples to gift multiple times during courtship. This market demonstrates an opportunity for coloured gemstones. Our market research c
Slide 11: Diamonds most preferred, followed by rubies
Today, diamonds are the most preferred, followed by rubies Source: 'Sustainability: The Future of Coloured Gemstones in China', Research Report Conducted Q4 2019 by Gemfields Quantitative focus groups and one-on-one interviews with jewellery owners Beijing, Shanghai and Chengdu. Quantitative survey
Slide 12: Rubies and diamonds most self-purchased
Rubies and diamonds were the most self-purchased gemstones in the past 12 months Source: 'Sustainability: The Future of Coloured Gemstones in China', Research Report Conducted Q4 2019 by Gemfields Quantitative focus groups and one-on-one interviews with jewellery owners Beijing, Shanghai and Chengdu
Slide 13: Rubies are the first choice for future purchase
Rubies are the first choice for future purchase FOLLOWED CLOSELY BY DIAMONDS AND EMERALDS Source: 'Sustainability: The Future of Coloured Gemstones in China', Research Report Conducted Q4 2019 by Gemfields Quantitative focus groups and one-on-one interviews with jewellery owners Beijing, Shanghai an
Slide 14: 97% willing to pay premium for responsibly sourced gemstones
97% of consumers are willing to pay a premium for responsibly sourced gemstones 24% 24% 18% 17% 16% 3% 0% premium 1-10% 11-20% 21-30% 31-40% 41% premium premium premium premium premium or over Source: 'Sustainability: The Future of Coloured Gemstones in China', Research Report Conducted Q4 2019 by G
Slide 15: Changes in the jewellery industry mean opportunity
Changes in the jewellery industry mean opportunity STRIKE NOW TO MOVE AWAY FROM THE DIAMOND MONOPOLY There is already an inherent love for coloured gemstones that has withstood the ages. With attitudes shifting and traditions changing, there is an increasing opportunity for coloured gemstones. The c
Slide 16: Gemfields' approach to marketing coloured gems
Gemfields’ approach to marketing coloured gems Responsibly sourced Zambian emeralds and Mozambican rubies. Creating sustainable livelihoods through local development programs. A Story in Every Gemstone | Discover more about Gemfields and Fabergé at Gemfields.com
Slide 17: Gemfields uniquely placed to market coloured gemstones
Changes in the jewellery industry MOVING AWAY FROM THE ENGAGEMENT DIAMOND SCENARIO As a respected industry leader, Gemfields is uniquely placed to market and promote coloured gemstones. 1. To emotively engage consumers with the individuality and natural beauty of coloured gems; 2. To educate consume
Slide 18: 2018-2021 Marketing Strategy: three strands
Gemfields’ 2018-2021 Marketing Strategy THREE STRANDS OF FOCUS A Story in Every Gemstone Education Leadership Visibility 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 18
Slide 19: Sub-strands to visibility focus area
Gemfields’ 2018-2021 Marketing Strategy SUB-STRANDS TO VISIBILITY FOCUS AREA A Story in Every Gemstone Visibility Jewellery Fashion Arts 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 19
Slide 20: Common questions regarding Gemfields' approach
Common questions regarding Gemfields’ approach Responsibly sourced Zambian emeralds and Mozambican rubies. Empowering local communities by establishing schools, education initiatives and scholarships. A Story in Every Gemstone | Discover more about Gemfields and Fabergé at Gemfields.com
Slide 21: Why focus on consumers, and not just trade?
Why focus on consumers, and not just trade? OR, WHAT DOES B2C ADD TO GEMFIELDS, A B2B BUSINESS ? The market will not grow without consumer demand: • Consumers need to be educated on how to buy coloured gems so they are confident going into a store and purchasing one. We cannot expect jewellery brand
Slide 22: Marketing efforts benefit all gem suppliers?
But our marketing efforts benefit all gem suppliers? WHY MARKETING MUST IDENTIFY GEMFIELDS AS THE FAVOURED CHOICE Gemfields doesn’t own ALL of the coloured gemstone mines and is therefore not the sole beneficiary of its B2C marketing and advertising efforts. De Beers’ marketing also uplifted all dia
Slide 23: Why can't others advertise coloured gems for us?
Why can’t others advertise coloured gems for us? CAN COLOURED GEMS SELL THEMSELVES? Why can’t other companies advertise coloured gemstones on Gemfields’ behalf ? - Coloured gemstones are still the ‘outsiders’, gaining in popularity, but not yet the unprompted choice. - They are not incentivised to d
Slide 24: What happens if Gemfields stops marketing?
What happens if Gemfields stops marketing? CAN COLOURED GEMS SELL THEMSELVES? - De Beers’ marketing budget of circa USD 170 million is not insignificant, it dwarfs the majority of jewellery brands and the red carpet, digital searches and product placements is therefore likely to be dominated by diam
Slide 25: A View from Henry Ford
A View from Henry Ford 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 25
Slide 26: The TanzaniteOne Story
The TanzaniteOne Story How a decline in marketing spend played a key role in damaging a once great gemstone 1. TanzaniteOne was the worlds’ leading supplier of Tanzanite for two decades. 2. This relatively unknown gemstone was mined in Tanzania by TanzaniteOne (ex Afgem) since 1999. 3. The Tanzanite
Slide 27: Lessons from the Chinese Market
Lessons from the Chinese Market The potential consequences of not marketing 1. China is a relatively new market for coloured gemstones but has quickly become one of the most important. 2. In 2012 and 2013 the Chinese were buying large volumes of rubellite (red tourmaline) and large size tanzanite. 3
Slide 28: Marketing Spend Boosted Emerald Prices
Gemfields’ Marketing Spend Boosted Emerald Prices Gemfields Higher Quality Auction Results (USD per carat) Zambian Rough Emerald Prices (GEMFIELDS Higher Quality Auctions) (USD per carat) 90.00 Kagem Rough (Higher Quality) 82.53 80.00 Emerald Auctions 71.85 Weight Offered vs Weight Sold (grams) - HI
Slide 29: Group-wide selling, marketing & advertising spend
Gemfields’ group-wide selling, marketing & advertising spend USD million (includes FABERGÉ) The figures shown INCLUDE Fabergé’s product development, insurance and logistics costs 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 29
Slide 30: Annual Spend as % of Total Group Revenue
Gemfields’ Annual Selling, Marketing & Advertising Spend …AS A % OF TOTAL GROUP REVENUE 20% 15% 10% 5% 0% 2012 2013 2014 2015 2016 2017 2018 2019 Group revenue represents total Group revenue from auctions and Fabergé. The selling, marketing and advertising costs include Fabergé and auction costs. 22
Slide 31: What % of revenue spend on marketing is typical?
What % of revenue spend on marketing is typical? This suggests, at 10% of revenue, that Gemfields should spend some USD 20 million. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 31
Slide 32: What is a typical % of budget spent on marketing?
What is a typical % of budget spent on marketing? Assuming a Gemfields group-wide cost budget of circa USD 130 million per annum, 12.5% would imply annual marketing spend of around USD 16 million. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 32
Slide 33: Annual Spend excluding Fabergé
Gemfields’ Annual Selling, Marketing & Advertising Spend USD MILLION, FOR THE GEMFIELDS GROUP EXCLUDING FABERGÉ 12,000 10,000 8,000 6,000 4,000 2,000 - 2012 2013 2014 2015 2016 2017 2018 2019 The graph shows all selling, marketing and advertising costs including the costs of holding auctions in the
Slide 34: 2019 Spend by Category excluding Fabergé
Gemfields’ Annual Selling, Marketing & Advertising Spend USD MILLION, ANALYSIS BY CATEGORY FOR 2019 FOR THE GROUP EXCLUDING FABERGE 6,000 5,000 4,000 3,000 2,000 1,000 - Events Advertising Public Relations & Agency Marketing & Press Auction Expenses (selling Other Fees Materials costs) Total sum: US
Slide 35: 2019 Spend by Category: percentages
Gemfields’ Annual Selling, Marketing & Advertising Spend ANALYSIS BY CATEGORY FOR 2019 THE GROUP EXCLUDING FABERGE 4% 14% 11% 10% Events Advertising 7% Public Relations & Agency Fees Marketing & Press Materials 54% Auction Expenses (selling costs) Other Total spend of USD 10.1 million The data repre
Slide 36: Fabergé Annualised Marketing Spend
FABERGÉ Annualised Selling, Marketing & Advertising Spend USD $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2012 2013 * 2014 2015 * 2016 2017 2018 * 2019 Advertising Events and Exhibitions PR Agency and Events Online & Social Media Cooperative Marketing Visual Merchandising Pa
Slide 37: Snapshot of 2019 Marketing Results
Snapshot of 2019 Marketing Results Responsibly sourced Zambian emeralds and Mozambican rubies. Enhancing environmental sustainability by regenerating land and replanting native flora. A Story in Every Gemstone | Discover more about Gemfields and Fabergé at Gemfields.com
Slide 38: Recent marketing activity overview
Recent marketing activity overview 1. Education: 1. Buyer’s Guides 2. Paid partnerships – GQ 2. Leadership: 1. Knight Frank's Luxury Investment Index: coloured gems industry outperforming jewellery sector 2. Retail seminar 3. Visibility: 1. Advertising 2. Events – Paris Couture 3. Brand partnerships
Slide 39: Buyer's Guides
Buyer’s Guides Four booklets and corresponding short films for use at point of sale (partner jewellery brands and Fabergé), talking through the allure of emeralds, rubies, a buyer’s guide and responsible sourcing. Available in EN & CN. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields
Slide 40: Education: GQ Partnership
Education GQ PARTNERSHIP: HOW TO BUY COLOURED GEMS Total Page Views Total Planned Impressions 34,500 2,369,138 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 40
Slide 41: Leadership: Knight Frank Luxury Investment Index
Leadership KNIGHT FRANK LUXURY INVESTMENT INDEX 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 41
Slide 42: Coverage for Knight Frank Report
Coverage for Knight Frank Report COLOURED GEMS OUTPERFORM JEWELLERY MARKET 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 42
Slide 43: Coverage for Knight Frank Report
Coverage for Knight Frank Report THE RISE OF COLOURED GEMS – HOW TO INVEST 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 43
Slide 44: Sector Leadership: Retail Seminar
Sector Leadership RETAIL SEMINAR – LONDON, UK – INTRODUCTORY COURSE IN EMERALDS, RUBIES AND SAPPHIRES FOR 100 RETAIL STAFF 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 44
Slide 45: Coverage for Retail Introductory Course
Coverage for Retail Introductory Course UK, MIDDLE EAST AND CHINA HIGHLIGHTS 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 45
Slide 46: Visibility: Advertising Reach 2019
Visibility ADVERTISING REACH 2019 Total Impressions: 417M Landings To Site: 919K Added Value Secured: 17.2M Digital Impressions: Programmatic Impressions: Social Impressions: Print Impressions: OOH Impressions: Partnerships 87.2M 12.9M 121M 17.5M 69.5M Impressions: 108.5M India Cinema Footfall: 144K
Slide 47: Visibility: Paris Couture 2019
Visibility: Jewellery PARIS COUTURE 2019: SUITE OF AFRICAN GEMSTONES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 47
Slide 48: Bibi van der Velden's Memento Mori Ring
Bibi van der Velden’s Memento Mori Ring ON DISPLAY FOR 9 MONTHS IN AMSTERDAM AS RESPONSIBLY SOURCED JEWELLERY Bibi van der Velden’s rings 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 48
Slide 49: International Coverage for Memento Mori Ring
International Coverage for Memento Mori Ring FIRST CONTEMPORARY PIECE AT HERMITAGE AMSTERDAM MUSEUM 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 49
Slide 50: Brand Partnership: Ruth Tomlinson
Brand Partnership: Ruth Tomlinson CELEBRATING UNIQUE INCLUSIONS 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 50
Slide 51: Coverage for Ruth Tomlinson Collaboration
Coverage for Ruth Tomlinson Collaboration CONSUMER AND TRADE TITLE HIGHLIGHTS 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 51
Slide 52: Dubai Mall Aquarium: Promoting Fabergé
Visibility: Jewellery DUBAI MALL AQUARIUM: PROMOTING FABERGÉ Driving footfall to Fabergé’s Dubai store to increase visibility of coloured gemstone jewellery: Impressions: 5,250,000 Impressions: 2,625,000 th st Live Date: 7 October Live Date: 21 October Duration: 2 weeks Duration: 2 weeks 22/07/2020
Slide 53: Dubai Mall Selfie Pop Up
Visibility: Jewellery DUBAI MALL SELFIE POP UP: PROMOTING FABERGÉ 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 53
Slide 54: Visibility: Fashion, Mine Magazine
Visibility: Fashion MINE MAGAZINE: IMPRESSIONS 1,264,546 DWELL TIME: 3 MINUTES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 54
Slide 55: Vanity Fair Partnership
Visibility: Fashion VANITY FAIR PARTNERSHIP: RESPONSIBLE SOURCING Total impressions 253,630 Page Views Readership 174,000 Total impressions 2,898 438,062 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 55
Slide 56: Visibility: Arts, VOID
Visibility: Arts VOID BY DAN TOBIN SMITH – CELEBRATING INCLUSIONS 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 56
Slide 57: International PR Coverage for VOID
International PR Coverage for VOID EXPLORING THE BEAUTY OF GEMSTONES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 57
Slide 58: International PR Coverage for VOID
International PR Coverage for VOID EXPLORING THE BEAUTY OF GEMSTONES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 58
Slide 59: International PR Coverage for VOID
International PR Coverage for VOID BRINGING TO LIFE ZAMBIAN EMERALDS AND MOZAMBICAN RUBIES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 59
Slide 60: International PR Coverage for VOID
International PR Coverage for VOID AN IMMERSIVE JOURNEY INSIDE GEMSTONES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 60
Slide 61: International PR Coverage for VOID
International PR Coverage for VOID AN IMMERSIVE JOURNEY INSIDE GEMSTONES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 61
Slide 62: Visibility: Art021 Shanghai
Visibility: Arts ART021 SHANGHAI – ENGAGING CONTEMPORARY ART FAIR AUDIENCE 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 62
Slide 63: International PR Coverage for Art021
International PR Coverage for Art021 Installation ART021 SHANGHAI – ENGAGING CONTEMPORARY ART FAIR AUDIENCE 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 63
Slide 64: International PR Coverage for Art021
International PR Coverage for Art021 Installation ART021 SHANGHAI – ENGAGING CONTEMPORARY ART FAIR AUDIENCE 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 64
Slide 65: Visibility: Design/Miami
Visibility: Arts DESIGN/MIAMI – ENGAGING CONTEMPORARY ART FAIR AUDIENCE 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 65
Slide 66: Coverage for Design/Miami Activation
Coverage for Design/Miami Activation US COVERAGE HIGHLIGHTING THE JOY OF COLOUR 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 66
Slide 67: International PR
International PR SELECTION OF 2019 HIGHLIGHTS Responsibly sourced Zambian emeralds and Mozambican rubies. Working with conservation partners to protect Africa’s wildlife and biodiversity. A Story in Every Gemstone | Discover more about Gemfields and Fabergé at Gemfields.com
Slide 68: Influencing Trends Through PR
PR INFLUENCING TRENDS THROUGH PR 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 68
Slide 69: PR - UK
PR - UK STIMULATING USE OF COLOURED GEMSTONES IN MEDIA 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 69
Slide 70: PR - UK
PR - UK STIMULATING USE OF COLOURED GEMSTONES IN MEDIA 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 70
Slide 71: PR - China
PR - China STIMULATING USE OF COLOURED GEMSTONES IN MEDIA 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 71
Slide 72: PR - Middle East
PR – Middle East STIMULATING COLOURED GEM PLACEMENTS IN UNITED ARAB EMIRATES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 72
Slide 73: PR - India
PR - India COLOURED GEMSTONE PLACEMENT 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 73
Slide 74: PR - India
PR - India COLOURED GEMSTONE PLACEMENT 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 74
Slide 75: Gemfields' Ownership of Fabergé
Gemfields’ Ownership of Fabergé A LOOK AT THE PROS AND CONS 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 75
Slide 76: Gemfields' ownership of Fabergé: pros and cons
Gemfields’ ownership of Fabergé A LOOK AT THE PROS AND CONS The 1885 Hen Egg The Egg That Started It All 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 76
Slide 77: Google Trends
Google Trends STRENGTH: Fabergé has far stronger cachet and much wider brand recognition than Gemfields. Fabergé catches consumer attention more effectively than Gemfields and is therefore a more effective and further-reaching marketing vehicle through which to promote coloured gemstones. Fabergé Ge
Slide 78: Google Trends
Google Trends Fabergé Gemfields 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 78
Slide 79: Google Trends: breakdown by region
Google Trends BREAKDOWN BY REGION/COUNTRY 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 79
Slide 80: Monthly visitors to Faberge.com vs. Gemfields.com
Monthly visitors to Faberge.com vs. Gemfields.com 2020 ONLY – Fabergé has seen strong growth Monthly Unique Website Visitors (Jan - Jun 2020) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Jan Feb Mar Apr May Jun faberge.com gemfields.com 22/07/2020 - Commercial in Confidence - see page 2 www
Slide 81: Monthly visitors, 5+ years
Monthly visitors to Faberge.com vs. Gemfields.com 5+ YEARS Unique Monthly Website Visitors Unique Monthly Website Visitors (1 Jan 15 - 30 Jun 20) (Ratio of Faberge:Gemfields) 140,000 (1 Jan 15 - 30 Jun 20) 35.0 120,000 30.0 100,000 25.0 80,000 20.0 60,000 15.0 40,000 10.0 20,000 5.0 0 0.0 Jan Apr Ju
Slide 82: Faberge.com
Faberge.com Actively used to promote the coloured gemstone message 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 82
Slide 83: Fabergé is a globally recognised name
Fabergé is a globally recognised name Fabergé is a globally recognised name synonymous with the pinnacle of luxury (as this Google search would suggest). Presentation Title Slide 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 83
Slide 84: Instagram Following
Instagram Following Fabergé presently has 118% more followers 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 84
Slide 85: PR Attractiveness
PR Attractiveness STRENGTH: Gemfields enjoys greater PR coverage and attracts more eyeballs as a result of Fabergé (“Fabergé-owner Gemfields…” is frequently used by journalists). 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 85
Slide 86: Luxury by Association
Luxury by Association STRENGTH: Fabergé allows Gemfields to educate luxury and fashion journalists and editors, who would not typically be interested in a mining company. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 86
Slide 87: Fabergé dresses the stars: Mila Kunis
Fabergé dresses the stars in coloured gemstones MILA KUNIS CAMPAIGN, PAID FOR BY GEMFIELDS Mila Kunis Mila Kunis 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 87
Slide 88: Fabergé x Legado x Rome de Bellegarde
Fabergé x Legado x Rome de Bellegarde CELEBRITIES, PARTNERSHIPS & COLLABORATIONS STRENGTH: Fabergé opens doors to celebrities more readily than does Gemfields (e.g. the Fenty family, where Fabergé partnered with Rorrey Fenty's Legado, which drew in his sister, Rihanna). 22/07/2020 - Commercial in Co
Slide 89: Coverage Highlights
Fabergé x Legado x Rome de Bellegarde COVERAGE HIGHLIGHTS 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 89
Slide 90: Fabergé dresses the stars in coloured gemstones
Fabergé dresses the stars in coloured gemstones CELEBRITIES, PARTNERSHIPS & COLLABORATIONS STRENGTH: Fabergé more easily reaches the red carpet and celebrities, allowing improved placement of coloured gemstones. Louise Roe Amy Adams Winnie Harlow 22/07/2020 - Commercial in Confidence - see page 2 ww
Slide 91: Fabergé dresses the stars in coloured gemstones
Fabergé dresses the stars in coloured gemstones CELEBRITIES, PARTNERSHIPS & COLLABORATIONS Kristen Stewart in Fabergé Kate Hudson in Fabergé Kim Kardashian in Fabergé Mario Testino for Vanity Fair, Paris Venice Film Festival Nick Knight for V Magazine, Paris Daphne Guinness in Fabergé Olivia Palermo
Slide 92: Fabergé partners with the FT
Fabergé partners with the FT for “My Life in Colour” feature DECEMBER 2019 Candice Lake Cate Underwood Clara Paget 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 92
Slide 93: Advertising campaigns
Advertising campaigns IIMPORTANT PRODUCT SHOWCASE 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 93
Slide 94: A Life in Colour campaign
Advertising campaigns “A LIFE IN COLOUR” CAMPAIGN 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 94
Slide 95: A Life in Colour campaign messaging
Advertising Campaigns “A LIFE IN COLOUR” CAMPAIGN MESSAGING STRENGTH: synergies in advertising with broader reach, maximising each advertising dollar. The most enduring legacies are born of the most colourful lives A LIFE IN COLOUR Fabergé proudly uses Gemfields coloured gemstones 22/07/2020 - Comme
Slide 96: A Life in Colour 2019 campaign messaging
Advertising campaigns “A LIFE IN COLOUR” 2019 CAMPAIGN MESSAGING 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 96
Slide 97: Campaign: rough gems and finished pieces
Advertising campaigns “A LIFE IN COLOUR” 2019 CAMPAIGN: ROUGH GEMS AND FINISHED PIECES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 97
Slide 98: Campaign: rough gems and finished pieces
Advertising campaigns “A LIFE IN COLOUR” 2019 CAMPAIGN: ROUGH GEMS AND FINISHED PIECES 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 98
Slide 99: Gemfields Group advertising campaign
Gemfields Group advertising campaign JOINT MESSAGING – CONNECTING MINE AND MARKET 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 99
Slide 100: China: global brand recognition
China GLOBAL BRAND RECOGNITION STRENGTH: As a more recognised name, Fabergé provides wider reach in a vital luxury goods market, paving the way to promote coloured gemstones. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 100
Slide 101: Fabergé opens doors to high-profile brands
Fabergé opens doors to high-profile brands & projects Celebrities, Partnerships & Collaborations STRENGTH: Fabergé opens doors to special and high-profile brands and projects more readily than does Gemfields (e.g. the Fabergé x The Ritz Easter Collaboration). 22/07/2020 - Commercial in Confidence -
Slide 102: Rolls-Royce Spirit of Ecstasy Fabergé Egg
“Rolls-Royce debuts ‘Spirit of Ecstasy’ Fabergé Egg” celebrities, Partnerships & Collaborations - October 2018 STRENGTH: Fabergé opens doors to special and high-profile brands and projects more readily than does Gemfields (e.g. the Fabergé x Rolls-Royce x Spirit of Ecstasy egg). “For the first time
Slide 103: Recent sales successes from client events
Recent sales successes from direct client events Client Engagement In June 2019, Fabergé hosted a range of direct client events which included a private preview of the Knight Frank Investment Report, a special 'Coloured Gemstone Workshop' and Afternoon Tea at the Lanesborough Hotel all geared toward
Slide 104: The art of bespoke
The art of bespoke UHNWIs Commission Work Fabergé Reveals the Pearl Egg February 2015 “Fabergé revives tradition with £1.3m Qatar egg” “Fabergé unveils a new pearl egg 100 years after the last Fabergé Imperial Egg” 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 104
Slide 105: Fabergé featuring Gemfields emeralds
A selection of Fabergé featuring Gemfields emeralds 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 105
Slide 106: Fabergé featuring Gemfields rubies
A selection of Fabergé featuring Gemfields rubies 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 106
Slide 107: 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com
22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 107
Slide 108: 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com
22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 108
Slide 109: Coloured Gems Invisibly-Set by Fabergé
Coloured Gems Invisibly-Set by Fabergé 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 109
Slide 110: 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com
22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 110
Slide 111: 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com
22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 111
Slide 112: 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com
22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 112
Slide 113: Fabergé in the Press: United Kingdom
Fabergé in the Press UNITED KINGDOM 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 113
Slide 114: Fabergé in the Press: USA
Fabergé in the Press USA 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 114
Slide 115: Fabergé in the Press: USA
Fabergé in the press USA 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 115
Slide 116: Fabergé in the Press: Middle East
Fabergé in the press MIDDLE EAST 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 116
Slide 117: Fabergé in the Press: China
Fabergé in the press CHINA 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 117
Slide 118: Fabergé client events and gemstone masterclasses
Fabergé client events and gemstone masterclasses STRENGTH: Fabergé allows Gemfields to engage directly with coloured gemstone consumers and to better understand how they perceive coloured gemstones, traceability or where the gaps in their knowledge lie. This aids in shaping Gemfields’ own marketing
Slide 119: Beneficial use of Global Points of Sale
Beneficial use of Global Points of Sale STRENGTH: Fabergé has access to global points of sale. From 1st June – 31st August 2019, Fabergé and Gemfields partnered on an in-store initiative at Harrods to highlight the journey of mine to market. This included visual merchandising, private events and act
Slide 120: Fabergé's Wholesale Distribution Network
Fabergé’s Wholesale Distribution Network STRENGTH: Fabergé’s network of 80+ multi-brand retailers (who purchase from Fabergé on a wholesale basis) allows in-store display and marketing of coloured gemstones, with training and promotion to store owners and shop-floor staff. Gemfields supplies ‘How to
Slide 121: The lack of revenue growth has been criticised
The lack of revenue growth has been criticised… Fabergé’s headline revenue has remained flat at circa USD 12 million since 2015…. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 121
Slide 122: Less reliant on one key customer
…but the detail is important: Fabergé is much less reliant today on one key customer: % of Total Fabergé Sales to #1 Client Total Fabergé Sales excluding #1 Client (Qatari) (Qatari) (USD) 40% 12,000,000 35% 10,000,000 30% 8,000,000 25% 20% 6,000,000 15% 4,000,000 10% 2,000,000 5% 0% 0 2015 2016 2017
Slide 123: Operating costs and cash needs are better
…and operating costs and cash needs are markedly better! Fabergé Operating Costs (USD) Total Funding Required from Gemfields (USD) 18,000,000 25,000,000 16,000,000 14,000,000 20,000,000 12,000,000 15,000,000 10,000,000 8,000,000 10,000,000 6,000,000 4,000,000 5,000,000 2,000,000 0 0 2015 2016 2017 2
Slide 124: Rolling Month Funding Provided to Fabergé
Rolling 12 Month Funding Provided to Fabergé by Gemfields to December 2019 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 124
Slide 125: Pieces sold and sales transactions increasing
…number of pieces sold and sales transactions concluded are increasing: Fabergé # of Pieces Sold Fabergé # of Sales Transactions 2,500 1,000 900 2,000 800 700 1,500 600 500 1,000 400 300 500 200 100 0 0 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 22/07/2020 - Commercial in Confidence - see pag
Slide 126: Customer base healthier despite closing retail operations
…and the customer base is healthier despite closing 5 retail operations Number of Unique Clients (Retail and Wholesale) 500 450 400 350 300 250 200 150 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Retail Unique Customers Wholesale Unique Customers Fabergé Directly Operated Retail
Slide 127: Fabergé's Gemstone Purchasing
Fabergé’s Gemstone Purchasing (USD per carat) STRENGTH: Fabergé’s purchasing of gemstones in the market (which includes from Gemfields’ Authorised Auction Partners) provides feedback on trade prices for coloured gemstones. 22/07/2020 - Commercial in Confidence - see page 2 www.gemfields.com 127
Slide 128: Fabergé's Gemstone Sales
Fabergé’s Gemstone Sales STRENGTH: Fabergé’s sales of coloured gemstone jewellery to end- consumers provides feedback on retail pricing and price elasticity for coloured gemstones. (Data is shown is at the date of sale, showing rings only, and allocates the overall selling price of the piece across
Slide 129: Fabergé's Gross Margin on Gemstone Sales
Fabergé’s Gross Margin on Gemstone Sales STRENGTH: Fabergé’s purchasing and sales aid in monitoring profit margins and gathering important pricing data. This aids not only Gemfields but also allows other jewellers to better understand the margins generally offered by coloured gemstones. (Data is sho
Slide 130: Weaknesses
Weaknesses a. Fabergé remains loss-making (almost 11 years after re-launch), though gradual progress continues to be made. b. In 2019, Fabergé required almost USD 5 million of funding from GGL, money which could have been deployed elsewhere or paid out to GGL shareholders. However, this is a signifi
Slide 131: Threats
Threats a. The investor markets (which often favour ‘single focus’ companies) struggle to understand why Gemfields, perceived to be a “mining company” owns Fabergé, a “jewellery” company. The vital importance of marketing for Gemfields is not well understood by mining investors despite Gemfields’ pr
Slide 132: Opportunities
Opportunities a. There remains a considerable commercial opportunity for a jewellery brand to become the “go to” brand for emeralds, rubies and sapphires (e.g. the “king of precious coloured gems"). This space is not presently occupied in the mind of the consumer. b. Fabergé remains one of the most
Slide 133: Contact details
1 C A T H E D R A L P I A Z Z A L O N D O N S W 1 E 5 B P U N I T E D K I N G D O M T : + 4 4 2 0 7 5 1 8 3 4 1 9
Gemfields Group — Marketing and Fabergé webinar (July 2020) on 6ix