KDDL Limited

ETHOS Limited
Result Update Presentation
Q2 FY16

Safe Harbor
This presentation and the accompanying slides (the Presentation), which has been prepared by KDDL Limited (the Company),
solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any
securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No
offering of securities of the Company will be made except by means of a statutory offering document containing detailed
information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but
the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth,
accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive
and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any
omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Companys market opportunity and business
prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of
future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These
risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various
international markets, the performance of the industry in India and world-wide, competition, the companys ability to successfully
implement its strategy, the Companys future levels of growth and expansion, technological implementation, changes and
advancements, changes in revenue, income or cash flows, the Companys market preferences and its exposure to market risks, as
well as other risks. The Companys actual results, levels of activity, performance or achievements could differ materially and
adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to update any forwardlooking information contained in this Presentation. Any forward-looking statements and projections made by third parties included
in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and
projections.

Continue to Grow Sustainably - H1 FY16 Consolidated

15%

4%

Revenue

EBITDA

Rs. 211 Crs

Rs.17 Crs

22%
PAT after MI
Rs. 7 Crs

1.9x
PAT after MI Margin
3.2%

38%
Cash PAT
Rs. 12 Crs

Performance Highlights - H1 FY16 Ethos

26%
Revenue

18%

Rs. 148 Crs

Same Store
Billing Growth

41%

43 bps

EBITDA

EBITDA Margin

Rs. 6 Crs

4.0%

28%
Revenue from Online
Lead Generation

77%
Cash PAT
Rs. 2 Crs

Strong Performance by Ethos in an Off-Season

Revenue (Rs. Crs)

H2

PAT (Rs. Crs)

Cash PAT (Rs. Crs)

163
(58%)

148

H2

3.1

H2

(131%)

5
(82%)

2
H1

0.1

118
(42%)

H1

-0.7

H1

(-31%)

FY15

FY16

FY15

FY16

(18%)

FY15

FY16

Asset Light Model In Ethos...

Focus on
Online
Presence

Rationalize
Store Presence

Expand
catchment
area of offline
store, leading
to higher
revenue

Minimize
Investment

Maximize
Reach

Reduce FrontEnd Cost like

Manpower and
Rental
expenses

Improve
Return On
Capital
Employed

Operating
Leverage
Playing Out
6

... Improving Returns

Reducing Front-end Rent & Manpower
Cost as % of Revenue

Growing Revenue (Rs.Crs)

+26%
148

15.4%

15.0%

-90 bps
13.5%

118

12.6%

92
72

H1 FY13

H1 FY14

H1 FY15

H1 FY16

H1 FY13

Improving EBITDA (Rs.Crs)

H1 FY14

H1 FY15

Improving EBITDA Margin (%)

+41%

+43 bps
4.0%

6.0
3.6%

3.5%

4.2

2.6

2.6

H1 FY13

H1 FY14

H1 FY15

H1 FY16

2.8%

H1 FY16

H1 FY13

H1 FY14

H1 FY15

H1 FY16

... With Growing Online Sales

Online Billing (Rs. Crs)

Online as % of Ethos Revenue

+56%

+560 bps
28%

47

23%
30

15%
16

8%

H1 FY13

H1 FY14

H1 FY16

H1 FY15

H1 FY13

H1 FY14

H1 FY15

H1 FY16

Visitors on website (000)

+37%
3,527
2,575

1,314
413

H1 FY13

H1 FY14

H1 FY15

H1 FY16

... & Focus towards Investing in Advertising...

with ETHOS co-branding

9

TRUST CAMPAIGN across channels...

to Educate consumers about Watches

to Create Awareness about unscrupulous activities
To Reinforce our ETHOS
10

Pan-India Presence with Offline Store Network...

Indias Largest retail chain of Luxury
Watches with 41 stores
Amritsar

Ludhiana
Chandigarh
New Delhi

Presence across Metros, Tier I, Tier II

cities

Gurgaon

3 Duty Paid Retail Outlets at

Domestic Terminals

Bhopal
Ahmedabad
Vadodara
Surat
Mumbai
Thane

Nagpur

3 Duty Free Retail Outlets at

International Terminals

Hyderabad

Bengaluru

Chennai

Store Selection Criteria :

Reputed /Pedigree Mall at
Premium location where other
Premium brands present and
having better facility
management

Map for Illustration purpose only

11

Consolidated Profit & Loss Statement

Rs.Crs

Q2 FY16

Q2 FY15

YoY %

H1 FY16

H1 FY15

YoY%

FY15

Revenue

110

98

12%

211

183

15%

412

Cost of Goods Sold

66

54

123

102

240

Employee Expenses

16

15

31

28

58

Other Expenses

19

19

39

37

75

EBITDA

9.6

11.1

17.4

16.7

8.7%

11.2%

8.3%

9.1%

9.5%

Other Income

3.1

0.9

4.1

1.8

2.0

Interest

3.9

4.3

8.0

8.1

15.3

Depreciation

2.9

3.0

5.7

6.0

11.8

PBT

5.9

4.7

7.7

4.4

13.9

Tax

0.4

1.6

0.8

1.5

5.0

PAT After MI

5.3

3.0

6.6

3.0

4.8%

3.0%

3.2%

1.6%

8.2

6.0

12.4

9.0

7.4%

6.1%

5.9%

4.9%

EBITDA Margin

PAT after MI Margin

Cash PAT
Cash PAT Margin

(13%)

77%

37%

4%

122%

39.0

8.8

2.1%
38%

20.6
5.0%

12

Consolidated Balance Sheet

Rs. Crs

Sep-15

Mar-15

Share capital

10

Reserves & Surplus

79

42

32

25

Long term borrowings

30

36

Deferred Tax Liabilities

Long Term Provisions

Short term borrowings

62

71

Trade Payables

82

86

Other current liabilities

45

41

347

318

Fixed assets

74

77

Long-term loans and advs.

Other non current assets

19

17

Inventories

188

169

Trade receivables

21

25

Cash and bank balances

28

13

Short-term loans and advs.

17

17

347

318

Shareholders Fund

Minority Interest
Non-current liabilities

Current liabilities

Total Liabilities
Non-current assets

Current assets

Total Assets

13

Profit & Loss Statement - Ethos

Rs.Crs

Q2 FY16

Q2 FY15

YoY %

H1 FY16

H1 FY15

YoY%

FY15

Revenue

79

63

25%

148

118

26%

281

Cost of Goods Sold

59

46

110

87

209

Employee Expenses

10

17

Other Expenses

11

10

23

20

41

EBITDA

4.0

3.6

6.0

4.2

EBITDA Margin

5.0%

5.7%

4.0%

3.6%

5.1%

Other Income

0.0

0.1

0.1

0.1

0.1

Interest

2.1

1.9

4.0

3.6

7.1

Depreciation

0.9

1.0

1.8

1.8

3.8

PBT

1.0

0.8

0.2

-1.1

3.5

Tax

0.3

0.3

0.1

-0.4

1.2

PAT

0.7

0.5

0.1

-0.7

0.8%

0.8%

0.1%

-0.6%

1.6

1.5

1.9

1.1

2.0%

2.3%

1.3%

0.9%

PAT Margin
Cash PAT
Cash PAT Margin

10%

29%

9%

41%

117%

14.3

2.4

0.8%
77%

6.1
2.2%

14

Ethos Balance Sheet

Rs. Crs

Sep-15

Mar-15

Share capital

31

31

Reserves & Surplus

24

20

Long term borrowings

Long Term Provisions

Short term borrowings

49

46

Trade Payables

71

70

Other current liabilities

24

12

209

189

Fixed assets

13

14

Long-term loans and advs.

13

11

Deferred Tax Asset

166

147

Trade receivables

Cash and bank balances

Short-term loans and advs.

209

189

Shareholders Fund

Non-current liabilities

Current liabilities

Total Liabilities
Non-current assets

Current assets
Inventories

Total Assets

15

Company Overview

Business Overview

Scalable
Retail Business ETHOS

Stable
Manufacturing Business

Indias Largest Retail Chain of

Luxury Watch Studios

Leading supplier of premium

watch components - watch
dials and watch hands
29%

Caters to demand from

international brands in
Switzerland & India
Engaged in manufacturing of
of High Precision Stamping
Parts & Precision
CAGR of 13% over FY11
FY15

*Figures updated as on date

71%

Authorized retailer of over 60

luxury watch brands, ranging
from Rs. 5,000 to more than
Rs.20,00,000
41 premium watch boutiques
across country
CAGR of 33% over FY11 FY15
80% subsidiary of KDDL Ltd

17

Stable Manufacturing Performance

Revenue (Rs.Crs)

EBITDA (Rs.Crs)

CAGR + 15%

CAGR + 44%

127
111
96

30

23%
20%

25
20

96

19%

111

127

18%
13%

13%

15

25
21

10
5

3%

12

FY13

FY14

FY15

8%

-2%

FY13

FY14

FY15

18

Scaling-Up Retail Performance

Increasing Online Revenue...
Rs. Crs

... Improved Absorption of Fixed Expenses

68

9.6%

9.6%
18.0%

9.5%

9.2%
36

10.0%

8.9%

8.8%

9.0%

17

16.0%
8.5%

17.9%

127

157

184

213

17.1%

17.3%

17.9%
16.1%

14.0%

8.0%

7.5%

90
12.0%
FY11

FY12

FY13

Offline

FY14

Online

FY15

7.0%

FY11

FY12

FY13

FY14

FY15

Front End expenses as % of Sales

EBITDA Margin before Central Expenses
19

Contact

For further information, please contact:

Company :

Investor Relations Advisors :

KDDL Limited
CIN : L33302HP1981PLC008123

Strategic Growth Advisors Pvt. Ltd.

CIN : U74140MH2010PTC204285

Mr. C. Raja Sekhar

rajasekhar@ethoswatches.com

Ms. Sanjita Ghosh / Mr. Shogun Jain

+91 7738358389 / +91 7738377756
gsanjita@sgapl.net / jshogun@sgapl.net

www.kddl.com / www.ethoswatches.com

www.sgapl.net