Annual General Meeting 1

Transcription

1 Annual General Meeting 1

2 Forward-Looking Information This disclosure contains certain forward-looking statements that are subject to risks and uncertainties that may cause the results or events predicted in this disclosure to differ materially from actual results or events. Forward-looking information is based on certain factors and assumptions regarding, among other things, mining, construction and exploration activities at the Diavik Mine, world economic conditions, the expected sales mix at Harry Winston and potential improvements in sourcing and purchasing polished diamonds. Specifically, in making statements concerning Aber s projected share of the Diavik Mine capital expenditure requirements, Aber has used a Canadian/U.S. dollar exchange rate of $0.89, and has assumed that construction will continue on schedule with respect to the A-418 dike and with respect to current underground mining construction initiatives. In making statements regarding estimated production at the Diavik mine, Aber has assumed that mining operations will proceed in the ordinary course according to schedule. With respect to statements concerning sales growth and new store openings at Harry Winston, as well as expected gross margin rates, Aber has assumed that current world economic conditions will not materially change or deteriorate, and that Harry Winston will be able to realize improvements in sourcing and purchasing. While Aber considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Annual General Meeting 2

3 Mining Segment Annual General Meeting 3

4 Mining Annual Segment Mining Segment Highlights Highlights Annual 8.27 million carats (100% basis) produced in CY2005: 9% increase in diamond production 14% improvement in annual processing rate Blended mill feed from A-154 South and A- 154 North Annual General Meeting 4

5 Quarterly Mining Segment Highlights 1.79 million carats (100% basis) produced in CYQ1-2006: Processing rate in-line with comparable quarters Diamond production in-line with comparable quarters Annual General Meeting 5

6 Production (100%, Expressed in 000 s Carats, calendar year) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Annual General Meeting 6

7 Diavik Mineral Reserves In-situ 12/31/05 Proven (Mct) Probable (Mct) Total (Mct) A154 South A154 North A Total Totals may not add up due to rounding Annual General Meeting 7

8 Reserve Reconciliation 95.6 Mcts 90.2 Mcts Opening Production '05 Plant Recovery Model Update Closing Reserves Reserves 12/31/04 12/31/05 Annual General Meeting 8

9 Additional Inferred Resources 12/31/05 Millions of Tonnes Carats per Tonne Millions of Carats A154 South A154 North A A Total Totals may not add up due to rounding Annual General Meeting 9

10 Resource Reconciliation 23.2 Mcts 23.4 Mcts Opening Resources North Ore Grade Closing Resources 12/31/04 12/31/05 Annual General Meeting 10

11 Winter Road Impact No material impact on production forecast or construction schedule: Anticipated cash operating cost increase of $9M (40%) Anticipated capital cost increase of $9M (40%) Alternative methods of transport implemented Annual General Meeting 11

12 Airlift Antonov AN-12 Annual General Meeting 12

13 Terex RH200 Excavator Bucket Annual General Meeting 13

14 Mine Plan Constructing the Second Dike Underground Feasibility Defining the A21 Resource Annual General Meeting 14

15 A418 Dike A418 Pit Underground access & Infrastructure A21 portal Annual General Meeting 15

16 A-418 Dike Completed 2005 Filter Blanket & Dredging Planned 2006 Embankment Vibro-densification Cut off wall Jet grouting Curtain grouting Annual General Meeting 16

17 A-418 Dike Same construction techniques as A kilometres Max. water depth 32 m 1.1 million tonnes rock fill 3-year const schedule Pre-strip in 2007 Annual General Meeting 17

18 Underground Mining Underground feasibility Access to the ore will provide key inputs to geotechnical and hydrological data Central case based on a conservative cutand-fill mining method Exploration decline A418 A154 S A154 N Annual General Meeting 18

19 A-21 Bulk Sample To establish pipe s value by 2006/7: Portal and decline construction underway to obtain bulk sample at depth Mini bulk sampling of several hundred tonnes for pilot plant test work Exploration drilling and 3D seismic survey to improve definition of grade and tonnage Feasibility study to assess mining viability Annual General Meeting 19

20 A-21 Annual General Meeting 20

21 What do you get with 3% of the world s rough diamond supply? Diamond Market Influence. Annual General Meeting 21

22 Aber Price Book % Harry Winston Acquisition 47% 2 Year Period Annual General Meeting 22

23 Aber Rough Diamond Price (Indexed to 100) medium low quality small high quality large high quality medium high quality small low quality First sale Opening of Indian office Annual General Meeting 23

24 Market Fundamentals Source: WWW International Diamond Consultants Ltd., October 2005 Annual General Meeting 24

25 While Harry Winston will never be for everyone, Retail Segment we re delighted to open new doors for a few more. Annual General Meeting 25

26 Retail Segment Highlights 2006 Annual $191.2 million in sales Contribution to earnings from operations of $11.8 million Strong results in the US and Far East Solid sales in the high end and private client segment Annual General Meeting 26

27 Retail Segment Highlights First Quarter 2007 $50.0 million in sales Contribution to earnings from operations of $2.4 million Strong comparable store sales Sales supplemented by new stores Annual General Meeting 27

28 Target Market Position Classic/ Generic GRAFF Mouawad Auction Houses Mauboussin Poiray HW Chaumet TIFFANY High Price Range Target Piaget Chopard CARTIER Chanel Boucheron Dior Fred BVLGARI De Beers/ LVMH JAR Innovative/ Design value-added Source: Company Estimates Low Price Range Target Annual General Meeting 28

29 Geography North America Europe As ia 26% 39% 35% Annual General Meeting 29

30 Geography % of sales Sales ($000) 50% % % % % % 0 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 North America Europe Asia Sales Annual General Meeting 30

31 World Wide Network Chicago London Las Vegas Beverly Hills Bal Harbour Ala Moana New York Paris Geneva Tokyo x2 Osaka Taipei Current locations (March 2006) Planned store openings Annual General Meeting 31

32 Enhancing Profitability Harry Winston Growth Targets E Industry Average* Sales (US MM) $ % CAGR 10 18% Gross Margin 51.1% +1% per annum 56 65% SG&A as a % of sales 44.9% -1% per annum 42 50% Inventory Turns * From published company sources and Company estimates Annual General Meeting 32 32

33 Sourced via Aber Annual General Meeting 33

34 New Flagship Design To create an elegant, refined environment for Harry Winston jewelry and watches more consistent with fine residential living than a traditional retail store To present a most graceful, enjoyable, luxury focused experience Annual General Meeting 34

35 New Salons Salon Façade Thierry Annual Despont General Meeting 35

36 Beverly Hills Annual General Meeting 36

37 Previous Design Annual General Meeting 37

38 Bal Harbour Façade Annual General Meeting 38

39 Bal Harbour Interior Annual General Meeting 39

40 Previous Design Annual General Meeting 40

41 Omotesando Façade Annual General Meeting 41

42 Omotesando Interior Annual General Meeting 42

43 Previous Design Annual General Meeting 43

44 Ala Moana Façade Annual General Meeting 44

45 Ala Moana Interior Annual General Meeting 45

46 Opening Events Annual General Meeting 46

47 Product Development Jewelry Collections: Bridal Up to $100,000 Core Up to $250,000 Statement From $250,000 Collections Design based Annual General Meeting 47

48 Product Development Bridal: All diamond engagement rings All gemstone wedding rings $86,000 Harry Winston Diamond Engagement rings from $15,000 Annual General Meeting 48

49 Product Development Core: All gemstones All classifications All men s jewelry Solitaires to Clusters Harry Winston diamond cluster earrings, $200,000 Annual General Meeting 49

50 Product Development Statement: Archival reproductions One-of-a-kind-pieces Custom designs Image: wreath Harry Winston Diamond Wreath Necklace, $1,950,000 Annual General Meeting 50

51 Product Development Collections Strong design concepts New designs Best sellers Marquesa Drop Earrings, $58,000 Annual General Meeting 51

52 Advertising Annual General Meeting 52

53 Advertising Avenue C $23,500 Premiere Excenter $41,500 Annual General Meeting 53

54 Status symbols? We d rather regard them as indicators of achievement. Financial Status Annual General Meeting 54

55 Annual Financial Highlights Mining Year over Year Sales: Up 24% Earnings from Operations: Up 40% Annual General Meeting 55

56 Annual Financial Highlights Retail Year over Year Sales: Up 44% Earnings from Operations: Up 162% Annual General Meeting 56

57 continued growth Annual General Meeting 57

58 1 st Quarter Financial Highlights Mining Year over Year Tax Savings of $10.4 million Average Sales: Up 52% Annual General Meeting 58

59 1 st Quarter Financial Highlights Retail Year over Year Sales: Up 20% Earnings from Operations: Up 190% Annual General Meeting 59

60 Earnings per Share (US $) 1.47* 1.20* 0.63* 0.80* 0.53* 0.91* 0.66* 0.62* 0.32* Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2005 FY2006 Q1 FY2007 * Cash earnings per share is not a recognized measure under Canadian GAAP and does not have a standardized meaning prescribed by Canadian GAAP and is therefore unlikely to be comparable to similar measures presented by other issuers. Cash earnings per share is earnings before non-cash income tax expense, non-cash foreign exchange gains (loss), and depreciation and amortization on a per share basis. Annual General Meeting 60

61 Segmented Sales (US $millions) Retail Mining Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2005 FY2006 Q1 FY2007 Annual General Meeting 61

62 Segmented Earnings from Operations (US $millions) Retail Mining Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 FY2005 FY2006 Q1 FY2007 Annual General Meeting 62

63 Working Capital (US $millions) $407 $455 $305 $157 $286 $306 $148 $122 $150 Current assets Current liabilities Current assets Current liabilities Current assets Current liabilities F2005 F2006 Q1 FY2007 Annual General Meeting 63

64 opportunity Annual General Meeting 64

65 Concluding Remarks Annual General Meeting 65

66 Relative Performance (Indexed to 100) Copper Zinc Gold Polished Diamonds Annual General Meeting 66

67 Relative Pricing 27% WWW International Diamond Consultants and Company estimates Annual General Meeting 67

68 Relative Performance 3 Years Annual General Meeting 68

69 Relative Performance 1 Year Annual General Meeting 69

70 Annual General Meeting 70