dil-inv-presentation--morgan -stanley-india summit-june-13.pdf

8/10/2019 DIL-Inv-Presentation--Morgan -Stanley-India Summit-June-13.pdf

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Dabur India Limited

June 2013, Mumbai


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Indian Economy

Real GDP Growth Rate Inflation

9.3% WPI based inflation Food Inflation CPI based inflation

.

5.0%

7.5%

10.9

8.7%10.3%

10.4%

FY11 FY12 FY13

6.0%

Apr12 May 12 Jun 12 Jul12 Aug12 Sep 12 Oct 12 Nov12 Dec12 Jan 13 Feb 13 Mar 13

Overview

Source: CSO estimates Source: Office of Economic Adviser, CSO estimates

Real GDP growth rate witnessed deceleration, particularly in FY13 Recently, Prime Minister's Economic Advisory Council (PMEAC) has projected GDPgrowth rate at 6.4% in FY14

Inflation articularl WPI based has witnessed some moderation durin fiscal 2012 13 RBI has initiated rate cuts in its recent policy reviews

2


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FMCG Sector in India

a third of revenues

As per a study conducted by Booz & Company, FMCG sector is expected to grow in the range of 12% to 17% upto 2020 and could touch a market size between Rs. 4,000 to Rs. 6,200 billion by 2020

Key Growth Drivers:

Low per capita Favourable

Low penetration

levels of

Shift to branded

products from Growth

potential in

consumer products

unbranded products

rural markets

3


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Category Penetration Levels

77% 80%80%

90%

Rural Penetration Urban Penetration

42%37%

57% 59%

50%

60%

18% 18%

4%

32%

19%

5%

26%

10%

20%

30%

Source: Industry data

0%

Toothpaste Shampoo Hair Oil Skin Cream Mosquito Repellants

Instant Noodles

Hair Dyes Floor Cleaners

Low penetration levels offer room for growth across consumption categories Rural penetration still lower but catching up with urban penetration levels

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Per Capita Consumption

7.4 7.7

5

6

7

8

9 2.72.4

2

2.5

3

3.2

0.8 0.30

1

2

3

4

China Indonesia India Malaysia Thailand

1.0 1.1

0.3

0

0.5

1

1.5


3.5

Toothpaste Per

Capita

Consumption

(in

US$)

0.51.0

2.9

2.0

1

1.5

2

2.5

3

.

0

0.5


Source: MOSL

India has very low per capita consumption levels as compared to other emerging economies

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Rural India PotentialIncremental Consumption Expenditure

in 2011 12 over 2009 10Percentage increase in monthly per capita expenditure

19.2%17.3%

Rural Urban

2994

3750in Rs. bn

7.3% 7.5%

13.2%. 11.8%.

Overview

Source: NSSO estimates Source: NSSO and Crisil estimates1987 94 1993 05 2004 10 2009 12 Urban Rural

Rural India comprises c. 70% of Indias 1.2 billion population and 240 million households Represents a huge opportunity for the FMCG sector Nielsen estimates it could touch US$100billion by 2025

easures e g er n mum upport r ces or agr cu tura pro uce, oan wa vers anemployment guarantee schemes, have promoted demand for consumer goods in rural Rural consumption growth is outpacing urban consumption with:

Percentage increase in monthly per capita expenditure being higher for rural in the period2009 2012

Incremental consumption expenditure in rural India being significantly ahead of urban India6


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Dabur Overview

Established in 1884 more than 128 Years of Trust & Excellence 14 billion Rupee brands

Worlds largest in Ayurveda and natural healthcare

Sales of Rs. 61.5 billion and profits of Rs. 7.6 billion in FY201213

20 world class manufacturing facilities catering to needs of diverse markets

rong overseas presence w contribution to consolidated sales

. million retail outlet reach in India7


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Dabur Performance Snapshot

Sales

28.1 33.9 40.8

52.8 61.5

into superior shareholder returns in INR bn

FY09 FY10 FY11 FY12 FY13 Market Capitalization

in INR bn

5.2 6.7 8.3

9.5 11.2

8.0

10.0

12.0

14.0

16.0

85.4

137.8167.2 185.4

.

in INR bn

0.0

2.0

4.0

6.0

FY09 FY10 FY11 FY12 FY13 FY09 FY10 FY11 FY12 FY13

3.9 5.0 5.7

6.4 7.6

5.0

7.0

9.0

11.0 Profit after Taxin INR bn

1.0

1.0

3.0

FY09 FY10 FY11 FY12 FY13 8


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Business Footprint

UK

Turkey

U.S. EgyptUAE

Nepal

Nigeria

BDesh

Sri Lanka

Domestic Mfg.Locations

Manufacturing Facilities

Key markets

Our strategy is to localize manufacturing, supply chain and product offerings to suit consumer requirements in each geography

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Our Billion Rupee Brands

Home Personal Care

Health Care

Foods

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Dabur Domestic Distribution Structure

DepotDepot (Carry & Forward Agents)

Modern TradeStockist

Modern TradeStockist

uper s oc s super s oc s s

WholesalersWholesalers Sub stockistsSub stockists

Insti customers

Insti

customers

Retail

trade

Retail

trade

Shoppers & ConsumersShoppers & Consumers Direct reach 0.8 mn outlets

Rural tradeRural trade

Total reach at 5.8 mn retail outlets > 3 rd highest among FMCG companies 11


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Dabur Business Structure

.

Domestic (69%)

(31%)

Consumer Care (55%)

Foods (11%)

Retail (1%)

Others (3%)

International

(19%)

Namaste Labs (8%) Group

(3%)

* Others includes Commodity Exports etc

Note: % figure in brackets indicate % share in Consolidated Sales for FY13

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Dabur Sales by Business Vertical Dabur derives 69% of its sales from Domestic business (Consumer Care + Foods + Others)

Foods11%

Others4%

and 31% from International business

InternationCare55%

al Business31%

Health Supplements

21%Oral Care17%

Skin Care6% Africa

21%

U.S.

Others4%

Digestives7%Home

Care7%

Asia

22%

OTC & Ethicals

12%Hair Care30%

17%

Middle East36%

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Consumer Care CategoriesCategory Key Products and Brands Market Position

Health

Chyawanprash: Honey: Glucose:#1 in Ayurvedic Tonics (Chyawanprash)

Supplements n ran e oney

#2 in Glucose

Herbal Digestives:

ges ves

OTC &

Baby Care: Cough & Cold: Womens Health

#1 in Ayurvedic OTC

Ethicals

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Consumer Care Categories (Contd.)Category Key Products and Brands Market Position

Hair Care

Hair Oils: Shampoo: #2 in Hair Oils

#4 in Shampoos

Toothpastes : Toothpowder: #3 in Toothpastes

#2 in ToothpowdersOral Care

Home Care

Air Freshener: Mosquito Rep. Cream: Toilet Cleaner: #1 in Air Fresheners

#1 in Mosquito Repellant Creams

#2 in Toilet Cleaners

Skin Bleaches Rose Water Creams & Lotions#1 in Skin Li htenin

Skin Care (Bleaches)

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Foods

Foods portfolio comprises Fruit Juices and Culinary rangeFruit Juices are under the brands Real, Activ and Burrst

Culinary range is under Hommade brand

Key Products and Brands Market Position

Juices & Nectars:

Culinary:

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Project Double Rural Coverage Enhancement

Project Double

rolled

out

during

2012

13

to

expand

direct

coverage

in

rural

markets

Ten states where this project has been implemented are Uttar Pradesh, Maharashtra, Madhya Pradesh, Bihar, West Bengal, Assam, Karnataka, Rajasthan, Orissa and Punjab

Direct coverage increased from 14,865 villages in March 2011 to 30,091 villages in March 2013

This has led to strong volume led growth in rural business with improved product width and profitability

Direct Village Coverage Dabur

14,86517,882

30,091

1 0 , 0 0 0

1 5 , 0 0 0

2 0 , 0 0 0

2 5 , 0 0 0

3 0 , 0 0 0

3 5 , 0 0 0

0

5 , 0 0 0

Mar 11 Mar 12 Mar 13

17


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International Business

International Sales Breakdown FY13Overview

U.S.

Daburs international business contributes 31% toconsolidated sales

Our focus markets are Africa, Middle East and Asia as

Africa

Middle East36%

22

Others4%

ese o er su s an a ong erm grow oppor un es

Our international business foray had been entirelyorganic since 1980s, until FY2010 11 when we acquiredHobi Group and Namaste Labs

17%e s r ve owar s g eve s o oca ze supp y c a ns

Over the years, we have made sustained investments inbrand building and marketing

Started as an ExporterFocus on Order fulfillment

Renamed franchisee as Dabur International LtdLocal operations further strengthened

Daburs international journey :

1980s Early 90s 2003 Onwards Today

. e up new m g ac es n ger a,Bangladesh

Set up a franchisee at Dubai in 1989

Demand generation led to setting up ofmfg in Dubai & Egypt

Building scale- c. 31% of Consol. SalesHigh Levels of Localization

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International Business (Contd.)Africas Bulging BaseAfrica Opportunity

With a population of c. a billion, Africa offers hugepotential for the consumer sector in the long run driven byfactors such as rapidly emerging middle class, withincreasing disposable incomes

Between 2005 and 2015, it is estimated that in Africa, the

share of individuals earning above US$1,000 will growfrom 39% to 55%. The rapidly emerging African middle class could number asmany as 300 million, out of a total population of one billion

The acquisition of U.S. based Namaste Labs, whichspecializes in African Hair Care was a step towardsenhancing our presence in Africa and exploiting these

Source: McKinsey on Africa, June 2010growt opportun t es

Namastes Product Suite, under the ORS brand (earlier Organic Root

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Growth Strategy

Three Pillars of Growth

xpan

Strengthen presence in existing categories and markets as well enter new eo ra hies

nnova e

Strong focus on innovation. Have rolled out new variants and products which have contributed to our rowth

cqu re

Acquisitions critical for building scale in existing categories and markets

Maintain dominant share in categories where we are category builders like Health

Supplements, Digestives etc.

Renovation of existing products to respond to changing demands

(Toothpowder to Toothpaste)

ou e synerg st c an make a good strategic fit

Target opportunities in our focus markets and categories

other categories

International expansion local manufacturing and supply chain to enhance

time to change in market demands

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New Launches India

Babool: Salt Variant

a mo a: aunc o nar ana var ant

Activ: Drinking Yoghurt

Gulabari: Moisturizing Lotion

Odonil Gels

Fem: Turmeric VariantLaunch of Ethnic Flavour Kokam

under Real Burrst21


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New Launches International

at a nr c e a r Oil Black Seed

Da ur Me icate Toothpaste

Vatika Professional Range

Launch of Fem range in Turkey

Vati a Henna Hair Color

Vati a ENRICHED Coconut Hair Oil with

Curry Leaves22


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Recent Performance61,46470000 Consolidated Sales grew by 16.3% during FY13

,

100002000030000400005000060000

Sales growth was largely driven by volume growths and some price increases and translation gains

Revenue (in Rs. mn)

0

FY12 FY13

11 243 EBITDA margin expanded to 18.3% in FY13 from9,476

4000

60008000

1000012000

EBITDA

(in Rs. mn)

17.9% in FY12 Material costs eased at 49.1% of sales in FY13v/s 51.0% in FY12

10000

0

FY12 FY13

.12.5% in FY12

6,449 7,634

2000

4000

6000

8000

PAT* (in Rs. mn)

.

in Consolidated PAT PAT margins improved to 12.4% in FY13 v/s12.2% in FY12

0

FY12 FY13*After minority interest 23


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Market Cap and Shareholding Pattern

288.8 DIIs, 4.3% Others,

6.9%

Shareholding Structure*Market Capitalization

in Rs. billion

85.4 Promoters, 68.7%

, .

FY09 May13*As of Mar 31, 2013

Dabur has witnessed exponential increase in market capitalization over the years an as crosse t e on mar n terms o mar et cap ta zat on

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Consolidated P&LIn Rs. million Q4FY13 Q4FY12 YoY (%) FY13 FY12 YoY (%)

e a es , . , . . , . , . .Other Operating Income 125.6 82.8 297.4 222.5Material Cost 7,398.7 6,848.9 8.0% 30,193.4 26,924.0 12.1%% of Sales 48.3% 50.2% 49.1% 51.0%Employee Costs 1,209.0 956.3 26.4% 4,712.3 3,874.2 21.6%% of Sales 7.9% 7.0% 7.7% 7.3%

Ad Pro 1,919.2 1,820.4 5.4% 8,369.8 6,595.1 26.9%% of Sales 12.5% 13.4% 13.6% 12.5%

Other Expenses 2,181.1 1,773.3 23.0% 8,187.7 6,759.2 21.1% . . . .

Other Non Operating Income 229.8 113.6 102.4% 945.0 574.0 64.6%EBITDA 2,958.3 2,433.2 21.6% 11,242.9 9,475.6 18.7%% of Sales 19.3% 17.8% 18.3% 17.9%Interest Exp. and Fin. Charges 149.8 57.2 161.6% 589.0 538.4 9.4%Depreciation & Amortization 281.6 293.3 4.0% 1124.0 1032.4 8.9%Profit Before Tax (PBT) 2,526.9 2,082.6 21.3% 9,529.9 7,904.7 20.6%Exceptional Item 0.0 0.0 46.6 0.0Tax Expenses 506.8 377.3 34.3% 1826.3 1463.8 24.8%PAT Before extraordinar item 2020.1 1705.4 18.5% 7657.1 6441.0 18.9%

% of Sales 13.2% 12.5% 12.5% 12.2%Extraordinary Item 0.0 0.0 0.8 0.0PAT(After extraordinary Items) 2020.1 1705.4 18.5% 7657.9 6441.0 18.9%Minority Interest (Profit)/Loss 14.6 0.4 23.7 7.8

ter xtra or nary tem Minority Int) 2005.5 1705.0 17.6% 7634.3 6448.8 18.4%

% of Sales 13.1% 12.5% 12.4% 12.2%

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Statement of Assets and LiabilitiesParticulars (in Rs. Million) As at 31/03/2013 As at 31/03/2012

EQUITY AND LIABILITIES are o ers un s(a) Share capital 1,742.9 1,742.1(b) Reserves and surplus 19,500.9 15,429.7

Sub-total - Shareholders' funds 21,243.8 17,171.82. Share application money pending

2. Minori ty in terest 120.6 30.33. Non-current li abilities

(a) Long-term borrowings 5,399.3 7,271.8(b) Deferred tax liabilities (net) 362.1 274.0(c) Other long-term liabilities 1.2 0.0(d) Long-term provisions 491.9 2,056.6

Sub-total - Non-current liabilities 6,254.5 9,602.44. Current li abilities

(a) Short-term borrowings 6,114.2 3,409.1(b) Trade payables 7,443.0 4,768.1(c )Other current liabilities 4,319.6 5,084.0(d) Short-term provisions 1,868.4 1,937.6

- - , . , .TOTAL - EQUITY AND LIABILITIES 47,364.1 42,003.3B ASSETS

1. Non-current assets(a) Fixed assets 10,530.5 8,853.6(b) Goodwill on consolidation 6,214.0 7,826.3(c) Non-current investments 1,304.7 892.8(d) Long-term loans and advances 157.7 258.4(e) Other non-current assets 3,126.8 1,019.2

Sub-total - Non-current assets 21,333.7 18,850.32 Current assets

(a) Current investments 5,014.1 3,932.4(b) Inventories 8,438.6 8,239.2c ra e rece va es , . , .

(d) Cash and cash equivalents 5,128.1 4,184.2(e) Short-term loans and advances 2,015.0 1,858.3(f) Other current assets 593.3 322.1

Sub-total - Current assets 26,030.4 23,153.0Total -Assets 47,364.1 42,003.3 26


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Disclaimer

Some of the statements made in this resentation contain forward lookin information thatinvolve a number of risks and uncertainties. Such statements are based on a number of

assumptions, estimates, projections or plans that are inherently subject to significant risks, aswell as uncertainties and contingencies that are subject to change. Actual results can differmaterially from those anticipated in the Companys forward looking statements as a result of a

var ety o actors, nc u ng t ose set ort rom t me to t me n t e ompany s press re eases anreports and those set forth from time to time in the Companys analyst calls and discussions. Wedo not assume any obligation to update the forward looking statements contained in thispresentation.

No part of this presentation shall form the basis of or may be relied upon in connection with anycontract or commitment. This presentation is being presented solely for your information and issubject to change without notice.

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dil-inv-presentation--morgan -stanley-india summit-june-13.pdf

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