Presentation Results Q1 2019

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.

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2. Business Model 5-7

3. Results 8-14

4. Group Key Initiatives 15-16

Pages

1. Executive Summary 4

3

Agenda

Executive Summary

• Q1 Revenues were 33.0% higher than same quarter of LY: Egypt’s revenues continued to

perform strongly with growth of 18.5% in the wholesale channel due to a successful advertising

campaign and strong customer uptake of new collections. Egypt’s retail revenues increased by

56.8% compared to the same quarter of last year due to the successful opening of six new

outlets during the last twelve months. Also, Egypt retail like-for-like shops revenues increased by

20% in the first quarter of 2019. In KSA, wholesale revenues increased by 24.5% compared to

the same quarter of last year due to a successful new collection and celebrity endorsement

campaign. Also, KSA’s retail revenues increased by 55.6% mainly due to consolidation of

revenues of the recently acquired franchise business of Tous which was acquired at the end of

October 2018.

• Gross profit of SAR 96.0 million for the first quarter of 2019, was 40.2% higher than the

same quarter of last year mainly due to higher operating revenues. Gross Profit margin also

improved by 3.2% due to cost saving initiatives that contributed in reducing production costs

• Net income for Q1 2019 came at SAR 12.0 Million, 32.5% higher same quarter LY. This is

due to higher operating revenues and higher gross profit margin due to cost saving initiatives

that contributed in reducing the production costs.

• L’azurde has ben growing revenues vs. prior year for the last four consecutive quarters.

Q1 revenues and net income are 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’AZURDE20 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

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WholesaleNet Volume and Price Impact

Revenues Variance – Q1 2019 (Million SAR)

115.0

3.9 1.2 6.8

4.8 16.0

5.4

153.0

50

70

90

110

130

150

170

Retail8

9

82.2 76.2 75.1

115.0

92.8 98.5 100.1

153.0

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019

Group Quarterly Revenues (Million SAR)

10

6.4

0.5

2.6

9.0

4.8

3.7

0.1

12.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2019

Group Quarterly Net Income (Million SAR)

77 93

38

60 115.0

153.0

-

20

40

60

80

100

120

140

160

Q1-2018 Q1-2019

Wholesale Retail

Retail Revenues at +56% in Q1 2019 vs. LY

11

+56%

+22%

% of Total 57% 38% 3% 2%

Vs. 2018 30%▲ 26% ▲ 39% ▲ >100% ▲

Operating Revenues by Country – Q1 2019Million SAR

KSA Revenues increased by 30%

12

86.7

58.3

4.2 3.9

-10

10

30

50

70

90

110

KSA Egypt Other GCC Other Export

Retail Gross Margin +82% in Q1 - 2019 vs. LY (Million SAR)

54

69

15

27

68

96

-

10

20

30

40

50

60

70

80

90

100

Q1-2018 Q1-2019

Wholesale Retail

+82%

+29%

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14

Q1

2018A 2019A Delta

Revenue 115.0 100.0% 153.0 100.0% 33.0%

Cost of revenue (46.6) -40.5% (57.0) -37.3% 22.5%

Gross Profit 68.5 59.5% 96.0 62.7% 40.2%

Selling and marketing (34.6) -30.1% (53.6) -35.0% 54.6%

General and admin (10.8) -9.4% (12.0) -7.9% 11.5%

Operating Income 23.0 20.0% 30.4 19.9% 31.9%

Other income – net (2.0) -1.7% (0.6) -0.4% -69.9%

Finance Charges – net (8.6) -7.4% (12.1) -7.9% 41.9%

Net Profit before Zakat 12.5 10.9% 17.7 11.5% 41.3%

Zakat (3.0) -2.6% (3.4) -2.2% 13.1%

Income Tax (0.4) -0.4% (2.2) -1.5% 432.7%

Net Income 9.0 7.8% 12.0 7.8% 32.5%

Earning per Share 0.2 0.3 32.5%

Group Consolidated Income Statements (Million SAR)

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

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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

16

Thank You

For investors relations matters please contact: investors@lazurde.com

L’azurde, a great history, a greater future

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