Analyst Meet -20 Results Conference Call Nov Market share gains in Hindi belt. Food Park Biscuit...

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Transcript of Analyst Meet -20 Results Conference Call Nov Market share gains in Hindi belt. Food Park Biscuit...

  • Analyst Meet

    Q2’19-20 Results

    Conference Call

    15th Nov 2019 1

  • Disclaimer / Safe Harbor Statement

    This presentation may contain statements which reflect Management’s current views and

    estimates and could be construed as forward-looking statements. The future involves risks and

    uncertainties that could cause actual results to differ materially from the current views being

    expressed. Potential risks and uncertainties include factors such as general economic conditions,

    commodities and currency fluctuations, competitive product and pricing pressures, industrial

    relations and regulatory developments.

    2

  • Q1 Q2 Q3 Q4 Q1 Q2

    Growth% 14% 13% 11% 10% 6% 6%

    24 month growth% 20% 21% 25% 24% 20% 19%

    We Delivered growths outpacing the market…with

    a healthy sequential shift of ~13%...

    2,225

    2,537 2,558 2,510 2,527

    2,855 2,827 2,764 2,677

    3,023

    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

    Consolidated NSV as per published results

    FY 17-18 (10%) FY 18-19 (12%)

    3

    FY 19-20 (6%)

    High base Healthy 24 month growth

    R s C

    rs .

    C o n

    s o li d a te

    d N

    S V

  • …And continued to strengthen our market leadership…

    4

    24.0

    25.0

    26.0

    27.0

    28.0

    29.0

    30.0

    31.0

    32.0

    33.0

    12-13 13-14 14-15 15-16 16-17 17-18 18-19 YTD 19-20

    B is

    c u

    it M

    a rk

    e t

    S h

    a re

    %

    Britannia Largest Competitor

    As per AC Nielsen

  • …In a tough market environment

    However, measures taken by Govt should help revive the economy

    5

    Slowing GDP growth

    Stress in rural economy with reduced real income from Agri

    Credit squeeze by Banks & NBFCs

    Interest rate cuts & liquidity easing measures

    Reduction in Corporate tax rate to spur investments

    Increase in MSPs for certain crops

    Package to boost exports

    India macro economic scenario Measures taken by Government

  • Investment

    Brand Equity

    Innovation &

    relaunches

    New Category

    Distribution

    Technology & backend

    Sustain- ability

    In this challenging situation, we however….

    continued our investments to drive profitable growth

    6

  • #1 Investment in Brands

    NC Healthy Start Activation

    Win a Sports Cycle every hour

    MBK TN Activation

    Win an educational trip for your child

    Treat Burst NC Cream Cracker

    Relaunch

    Key Brands on

    air

    Digital /

    Activations

    MBK in ROI

    7

    Treat Stars

    Consumer Promotions

    Goodday & Marie

  • #2 Innovation & Relaunches

    Goodday Relaunch Nutrichoice Arrowroot Relaunch

    Nutrichoice Cream Cracker RelaunchNew Launches

    Limited Edition launch Test launch - West

    8

    • Packaging change from Mat to Gloss

    • Bold brand identity

    • Recipe & design change

    • Packaging change

    • Recipe change – Sugar Free

    • Packaging change

  • Q1'19-20 Q2'19-20

    NSV Rs Crs.

    Q3'18-19 Q4'18-19 Q1'19-20 Q2'19-20

    NSV Rs Crs.

    Wafers

    • 10+% market share.

    • No. 3 Brand.

    Baked Salted Snacks

    #3 New category launches…

    Available in 3 formats in South :

    • Groovy Chips

    • Fun Sticks

    • Crunchy fills

    Plan to launch in West with commercialization of

    Ranjangaon salted snacks facility.

    9

  • Croissant

    ….New category launches

    Milk Shakes – Tetra pack

    2 Variants:

    • Chocolate

    • Vanilla

    • Improved product sensorial to suite Indian palate.

    • Wheat flour procurement issue resolved.

    • Reduced factory wastage & increased efficiency.

    • Focused launch in West Bengal & TN.

    10

    • 20+% market share.

    • No. 2 in Brand in less than a year of launch.

  • #4 Distribution drive

    11

    7.3

    10.0

    12.6

    15.5

    18.4

    21.0 21.3

    Mar'14 Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Sep'19

    D e c -1

    6

    J a n

    -1 7

    F e b -1

    7

    M a r-

    1 7

    A p r-

    1 7

    M a y -1

    7

    J u

    n -1

    7

    J u

    l- 1 7

    A u

    g -1

    7

    S e p -1

    7

    O c t-

    1 7

    N o v -1

    7

    D e c -1

    7

    J a n

    -1 8

    F e b -1

    8

    M a r-

    1 8

    A p r-

    1 8

    M a y -1

    8

    J u

    n -1

    8

    J u

    l- 1 8

    A u

    g -1

    8

    S e p -1

    8

    O c t-

    1 8

    N o v -1

    8

    D e c -1

    8

    J a n

    -1 9

    F e b -1

    9

    M a r-

    1 9

    A p r-

    1 9

    M a y -1

    9

    J u

    n -1

    9

    J u

    l- 1 9

    A u

    g -1

    9

    S e p -1

    9

    Steady increase in Numeric Distribution

    In L

    a k h

    s

    Sustaining Direct Reach

    7k 8k 10k

    14k

    18k 20k

    Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Sep'19

    N o o

    f R

    P D

    s ( R

    u ra

    l P re

    fe rr

    e d D

    e a le

    rs )

    Sustaining Rural distribution

    In %

    11.0%

    13.0%

    15.0%

    17.0%

    19.0%

    21.0%

    UP MP Gujarat Rajasthan

    2017-18 2018-19 YTD 19-20

    Market share gains in Hindi belt

    In %

  • Food Park

    Biscuit

    Cake including different-

    iated

    Croissant

    Salted Snacks

    #5 Hi-Tech food park at Ranjangaon - up and running

    12 Lines planned with a capacity of

    ~ 140,000 TPA

    Cake – Italy

    Biscuit line – Italy

    Biscuit line –USA

    Salted Snacks –France

    Technology investments for the future

    Technology

    Also a regional storage hub for Inventory 12

  • #6 Sustainability drive on plastic waste

    13

    • Awareness drive amongst employees by collection of ~ 2 MT of plastic waste across 6 locations

    • Digital campaign to inspire every person to make a start on the waste segregation journey

  • Adjacent Business..

    Bread: Focus continues to be on driving profitable growth

    Dairy: Low single digit growth, however improved profitability sequentially

    International: While Middle East & Africa continues to be challenging, America growing double digits. Nepal operations doing well coupled with steep market share gains.

    14

  • On the Cost front…

    15

  • 12-13 13-14 14-15 15-16 16-17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

    Flour

    12-13 13-14 14-15 15-16 16-17 Q1'18Q2 18Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

    Sugar

    12-13 13-14 14-15 15-16 16-17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

    RPO

    12-13 13-14 14-15 15-16 16-17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

    Milk

    Overall commodity inflation is moderate @ ~3%, basis

    strategic positions in key input material

    Rs./kgRs./kg

    Rs./kg Rs./Ltr

    Q2 Inflation: 14% Q2 Inflation: 1%

    Q2 Deflation : 13% Q2 Inflation: 37%

    16

  • And our journey on reducing wastages,

    leveraging fixed costs and driving cost

    efficiencies is moving ahead with full steam,

    which has resulted in…

    17

  • Operating Profit%

    295

    344 366 355 354

    417 409 390

    350

    447

    Q

    1

    Q

    2

    Q

    3

    Q

    4

    Q

    1

    Q

    2

    Q

    3

    Q

    4

    Q

    1

    Q

    2

    13.1%

    14.8%

    13.3% 13.6%

    14.3% 14.1% 14.0% 14.6% 14.5%

    14.1%

    C o n

    s o li d a te

    d O

    p e ra

    ti n

    g P

    ro fi t

    FY 17-18 (13.8%) FY 18-19 (14.3%)

    18

    Q1 Q2 Q3 Q4 Q1 Q2

    Growth% 20% 21% 12% 10% -1% 7%

    24 month growth% 23% 35% 44% 42% 19% 30%

    FY 19-20 (14.0%)

    Improved profitability by 170 bps sequentially

    R s C

    rs .

  • Financials

    19

  • Key Financial Lines – Consolidated (Reported) Rs. Crs.

    Particulars (Consolidated) Q2’19-20 Growth %

    Net Sales 3,023 6%

    Profit Before Tax 498* 9%

    Profit After Tax 404# 33%

    Particulars

    (Consolidated) 12-13 13-14 14-15 15-16 16-17 17-18 18-19

    19-20

    Q1

    19-20

    Q2

    Profit from

    Operations% 5.7% 8.0% 9.3% 13.2% 12.9% 13.8% 14.3% 13.1% 14.8%

    Profit before Tax% 5.8% 8.3% 12.2% 14.7% 14.5% 15.4% 16.1% 14.6% 16.5%

    Profit after Tax% 4.2% 5.8% 8.9% 9.9% 9.9% 10.2% 10.6% 9.4% 13.4%

    Source: Company Financials