Presentation Results Q2 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.

2

2. Business Model 5-7

3. Results 8-15

4. Group Key Initiatives 16-15

Pages

1. Executive Summary 4

3

Agenda

Executive Summary

• Q2 Revenues were 43% higher than same quarter of LY: In KSA, wholesale revenues

increased by 8.8% compared to the same quarter of last year, due to successful new collections

and celebrity endorsement campaign, while retail revenues witnessed a significant increase of

129.0% mainly due to consolidation of revenues of the recently acquired franchise business of

Tous and a 10% growth in L'azurde retail shops. Egypt’s revenues continued to perform strongly,

for the seventh quarter in a row, with a growth of 20.1% in the wholesale channel due to a

successful advertising campaign and strong customer uptake of new collections and in retail

channel by 64.4% compared to the same quarter of last year due to the successful opening of

seven new outlets during the last twelve months.

• Gross profit of SAR 80.8 million for the second quarter of 2019, was 44% higher than the

same quarter of last year mainly due to mainly due the significant increase in operating

revenues.

• Net income for Q2 2019 came at SAR 12.2 Million, 151% higher same quarter LY. Higher

operating revenues together with higher gross margin contributed to the significant increase in

net income.

• This is the fifth quarter in a raw with operating revenues exceeding the same quarters of

last year. Also net income in this quarter is 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’AZURDE24 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

7

WholesaleNet Volume and Price Impact

Revenues Variance – Q2 2019 (Million SAR)

92.8

2.2 (2.2) 5.9 3.2 26.4*

4.6

132.8

50

60

70

80

90

100

110

120

130

140

Retail

8* This figure includes the revenues of the recently acquired franchise business of Tous

WholesaleNet Volume and Price Impact

Revenues Variance – H1 2019 (Million SAR)

207.8

6.0 (1.0) 12.7 7.9

42.4*

9.9

285.8

50

100

150

200

250

300

Retail

9* This figure includes the revenues of the recently acquired franchise business of Tous

10

Group Quarterly Revenues (Million SAR)

121.9

82.2 76.2 75.1

115.0

92.8

115.0

92.8 98.5 97.8

153.0

132.8

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Last Year Current Year

11

Group Quarterly Net Income (Million SAR)

22.0

6.4

0.5

2.6

9.0

4.8

9.0

4.8 3.7

0.1

12.0 12.2

-

5.0

10.0

15.0

20.0

25.0

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

Last Year Current Year

Retail Revenues at +112% in Q2 2019 vs. LY

12

65 74

28

58 92.8

132.8

-

20

40

60

80

100

120

140

Q2-2018 Q2-2019

Wholesale Retail

142 168

66

118 208

286

-

50

100

150

200

250

300

H1-2018 H1-2019

Wholesale Retail

+112%

+14% +18%

+80%

% of Total 58% 37% 2% 3%

Vs. 2018 41%▲ 27% ▲ 13%▼ >100% ▲

Operating Revenues by Country – H1 2019Million SAR

KSA Revenues increased by 41%

13

166.3

105.5

6.6 7.5

-10

10

30

50

70

90

110

130

150

170

190

KSA Egypt Other GCC Other Export

Retail Gross Margin +158% in Q2 - 2019 vs. LY (Million SAR)

16

99

123

25

54

124

177

-

20

40

60

80

100

120

140

160

180

H1-2018 H1-2019

Wholesale Retail

46 54

10

27

56

81

-

10

20

30

40

50

60

70

80

Q2-2018 Q2-2019

Wholesale Retail

+158%

+18% +24%

+114%

15

Group Consolidated Income Statements (Million SAR)

Q2 H1

2018A 2019A Delta 2018A 2019A Delta

Revenue 92.8 100.0% 132.8 100.0% 43.1% 207.8 100.0% 285.8 100.0% 37.5%

Cost of revenue (36.8) -39.7% (52.0) -39.2% 41.3% (83.4) -40.1% (109.1) -38.2% 30.8%

Gross Profit 56.0 60.3% 80.8 60.8% 44.3% 124.4 59.9% 176.8 61.8% 42.0%

Selling and marketing (29.4) -31.6% (40.9) -30.8% 39.2% (64.0) -30.8% (94.4) -33.0% 47.5%

General and admin (9.3) -10.0% (11.9) -8.9% 28.2% (20.0) -9.6% (23.9) -8.4% 19.2%

Operating Income 17.4 18.7% 28.0 21.1% 61.6% 40.4 19.4% 58.4 20.4% 44.7%

Other income – net (1.1) -1.2% 0.6 0.4% -153.7% (3.1) -1.5% (0.0) 0.0% -99.3%

Finance Charges – net (8.7) -9.3% (13.4) -10.1% 54.8% (17.2) -8.3% (25.6) -8.9% 48.4%

Net Profit before Zakat 7.6 8.2% 15.2 11.5% 99.8% 20.1 9.7% 32.9 11.5% 63.4%

Zakat (2.6) -2.8% (2.6) -2.0% 1.4% (5.6) -2.7% (6.1) -2.1% 7.7%

Income Tax (0.2) -0.2% (0.4) -0.3% 139.1% (0.6) -0.3% (2.7) -0.9% 344.4%

Net Income 4.8 5.2% 12.2 9.2% 150.9% 13.9 6.7% 24.1 8.4% 73.8%

Earning per Share 0.1 0.3 150.9% 0.3 0.6 73.8%

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

19

Thank You

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

L’azurde, a great history, a greater future