DIL-Inv Pres Merrill Lynch India Investor Forum Sept-11

7/31/2019 DIL-Inv Pres Merrill Lynch India Investor Forum Sept-11

1/28

DABURINDIALIMITED

September 2011, London

Merrill Lynch - India Investor Forum

1

1


2/28

FMCG GROWTH STORY

I nd i a FMCG Secto r Vo lume and Va lue Gr ow th Ra te ( Y - o - Y % )

H igh Gr ow th Phase

Indias FMCG sector reported steady sales CAGR of 11.2% over FY00-10 on theback of stron annual volume rowth of ~8.5%.

Source: In dustry data, Standard Chartered Research

Growth being driven by increasing consumption led by rise in incomes,changing lifestyles and favorable demographics

As per a recent study conducted by Booz & Company, FMCG sector is expected

2

2

between of Rs. 4,000 to Rs. 6,200 billion


3/28

FMCG CURRENT SCENARIO

FMCG Spl i t : OTC, Food an d Non -Food FMCG industry pegged at US$30billion in CY10

Of the entire FMCG sector, Food is120,000

140,000

(11%)116,053

128,580Rs.Crores

4

3

, -

Rural sector accounts for about 33%of total revenue

40,000

60,000

80,000

100,000

OTCPRODUCTS

NonFood

FoodProducts

(8%)

(14%)

(19%)(10

%)

(14%)

82,615

97,276

48

46

46

45

4

4

FMCG Sales Chann el B reakdow n

Source: AC Nielsen

0

20,000

MATSep'07 MATSep'08 MATSep'09 MATSep''10

(20%)

(22%)48 50

50

3.3%

5.0%

5.9%

(Growth%)

Of the 7.8 million retail outlets forFMCG, Grocers are the dominant

58.6%

13.2%

8.2%

5.8%

format

Modern Trade contributes to 6%of FMCG sales

Grocers GeneralStores Chemists

3

3

Source : AC Nielsen

ModernTrade


4/28

PENETRATION LEVELS: SUFFICIENT HEADROOM

77%80%

80%

90%

Rural Penetration Urban Penetration

67%

57%59%

50%

60%

70%

37%

18% 18%

32%

19%

26%

20%

30%

40%

3% 2%4%5%

0%

10%

Toothpaste Shampoo Hair Oil Skin

Cream

Mosquito

Repellants

Instant

Noodles

Hair Dyes Floor

Cleaners

Source: Industry Data

Low penetration levels offer room for growth across consumption categories

4

4


5/28

PER CAPITA CONSUMPTION: ROOM FOR GROWTH

9 3

Sk in Care Per Cap i ta Consum pt io n ( in US$) Sham poo Per Cap i t a Consump t ion ( i n US$)

in US$in US$

I n d i a h a s l o w p e r c ap i t a co n s u m p t i o n a s co m p a r e d t o o t h e r e m e r g i n g e c on o m i es

3.2

7.4 7.7

3

4

5

6

7

8

1.0 1.1

.2.4

1

1.5

2

2.5

0.80.3

0

1

2

China Indonesia India Malaysia Thailand

0.3

0

0.5


2.9

2.5

3

3.5

Too thpas te Per Cap i t a Consump t ion ( i n US$)

in US$

0.5

1.0

0.4

.

0

0.5

1

1.5

2

5

5


Source: MOSL


6/28

INFLATION PLAYING SPOILSPORT

WPI has hovered in the 9% to 10%range this Calendar Year inspite ofprevious years high base

-

9.5% 9.5% 9.7% 9.7% 9.1% 9.4%

Month l y W PI Trend ( CY 2011)

inputs have witnessed sharp

increase, exerting pressure on grossmargins

ers s en y g n a on may s arimpacting demand for FMCG

Jan Feb Mar Apr May Jun

Dom est ic Coconut O il Pr ice (Jan-1 0 t o Jun e-11 ) Nym ex Crude ( A pr -10 t i l l June-11)

6

6


7/28

DABUR OVERVIEW

Established in 1884 - more than 125 Yearsof Trust & Excellence

Among top 4 FMCG companies in India

Eleven B i l l i on Rupee Brands

Worlds largest in Ayurveda and natural

healthcare Revenue of Rs. 41.1 billion and profits of

Rs. 5.7 billion in FY2010-11

Strong brand equity

Dabur is a household brand

Vatika and Real are Superbrands

a mo a , ea a ur ran e amongIndias Most Admired Brands

11 Brands with sales of over Rs. 1 billioneach

Wide distribution network covering 2.8million retailers across the country

17 world class manufacturing plantscatering to needs of diverse markets

Dabur ranked200 in theFortune India500 list

Dabur movesup to take the78th spot in theSuper-100

Dabur rankedamong MostTrusted Brands inIndia, according to

7

7

Strong overseas presence with around30% contribution to consolidated sales

list, released byBusiness India

Brand TrustReport, IndiaStudy, 2011


8/28

FINANCIAL PERFORMANCE

34,15841,099

40000

45000

Sales

in Rs. m i l l ion

12,004 12,849 12,356 14,170 17,56520,803

23,963,

0

5000

10000

15000

20000

25000

30000

FY02 FY03 FY04^ FY05 FY06* FY07 FY08 FY09 FY10** FY11^^

in %

EBI TDA Mar g in ( in % ) Net Pr o f i tin Rs . m i l l ion

3,9135,032

5,686

5000

600015.3%

17.1%18.1% 18.5% 18.3%

19.8% 19.9%

16.0%

18.0%

20.0%

22.0%

1,065 1,5582,142

, ,

0

1000

2000

3000

4000

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

.

10.0%

12.0%

14.0%


8

8

^ Sales show a decline in FY04 on account of de- merger of Pharm a business

* Balsara acquisition added 10% to topline in FY06* * Fem acquisition added 3.5% to topline in FY10^ ^ Hobi and Namaste acquisitions added 4% to t opline in FY11


9/28

GLOBAL FOOTPRINT

Canada

UK

Turkey

U.S. Egypt

UAENepal

N ige r i a

BDesh

Dom est ic Mfg .Locat ions

Manufacturing Facilities

Key markets

9

9

Our s t r a tegy i s t o l oca l ize m anu fac tu r i ng , supp l y cha inand p r oduc t o f f e r i ngs t o su i t consumer r equ i r em en ts

i n each g eogr aphy


10/28

ROBUST DISTRIBUTION NETWORK

Factory

St ock ist Su p er St ock ist I n s t i t u t i o n s

t r a d e

W h o lesa ler s Su b St ock ist

RETAI L TRADE

CONSUMERS

10

10

Di rect + I nd i rec t Reach c ov e r i ng c .3 m i l l ion Reta i l Ou t l e t s


11/28

PRESENCE IN FMCG CATEGORIES

Marke t Sha rePosi t ion Key Br an d sCategory

Hai r Care 12%3Dabur Amla hair Oil, Vatika hair oil &

Oral Car e

13%3Red toothpaste, Babool, Meswak, Redtoothpowder

Ay urv ed i cTonics

7%3 Dabur Gulabari, Fem, Dabur Uveda

67%1 Dabur Chyawanprash

Sk in Care

Diges t i ves 56%1 Hajmola

Real Fruit Juices Real Activ

Honey 1 50% Dabur Honey

11

11

Hair care includes Hair Oils & Shampoos; Oral care includes Toothpastes & Toothpowder; Skin care includesmoisturizers, face cleaning, lightening, anti ageing & other skin care products; Digestives includes herbal digestives

Glucose 2 25% Dabur Glucose


12/28

BUSINESS STRUCTURE

a u r op er a es r ou g r ee ocu se r a eg c u s n ess n s

FMCGportfoliocomprisingfour

distinctbusinesses:

PersonalCare

D iv is ion ConsumerHealthCare

HomeCare

Foods68%

I n t e r n a t i o n a lBus iness D iv is ion

Cateringtohealthandpersonal

careneedsofcustomersacross

differentinternational

markets

s annin MiddleEastand

Africa,SouthAsia,EUandU.S.

Consum er Hea l thDiv is ion

productsthat

deliver

the

age

old

benefitsofAyurveda inmodern

readytouseformats

8%

12

12Note: Percentage share in revenue based on FY11 Financials ; Hobi and Namaste included in International Business Division


13/28

TRANSITION TO THE NEW INTEGRATED STRUCTURE

N ew s t r uc t u re t o p rov i de enhanc ed c apab i l it y and s ca l e t o ou r cons um er hea l t h bu s iness

68%Hair

Care

OralCare

HairCare

Old St r uct u r e New St r uct u r e

Consumer

CareDivision

HealthSupplements

Digestives

HPC

OralCare

HomeCare

SkinCare

HomeCareDabur

SkinCare

HealthSupplements

8%Dabur Foods

ConsumerHealth

OTC

HealthCare

Digestives

OTC

Foods

13

13

Division Ethicals

International

Business

Division

EthicalsInternational

Business


14/28

HPC CATEGORIES

Market ShareKey B rands

Dabur Amla:Largest brand in

the portfolio

Vatika: Value addedcoconut oil

Anmol Hair Oil:Value propositionValue Share-ACN MAT Mar 2011

Market ShareKey B rand s

14

14

Vatika range of shampoosValue Share-ACN MAT Dec-2010


15/28

HPC CATEGORIES


Value Share -ACN MAT Mar, 2011

Dabur Red: Toothpaste& Toothpowder

Babool: Targeted ateconomy segment

Meswak: Premiumtherapeutictoothpaste

Market Share* Key B rand s

15

15

*Company estimates;

Includes Fem skin care portfolio

Gulabari range of rosebased skin careproducts:

Moisturizer, Facefreshener & Rose water

Fem Gold Bleach:Launched recently

Uveda: Range ofAyurvedic SkinCare


16/28

HPC CATEGORIES


Hom e Care

Value Share-ACN MAT March, 2011 for

Mosquito Repellants Cream category

Odonil: Air freshnerrange: Largest brandin the portfolio

Odomos: Mosquitorepellant skin cream

Sanifresh:

Toilet cleaner

16

16


17/28

HEALTH CARE CATEGORIES

Ch y a w a n p r a s h M ar k e t Sh a r e Key B rands

ea t u p p em en t s

Volume Share-ACN MAT - Mar, 2011

Dabur Chyawanprash:Largest selling healthsupplement in the

country

Dabur Glucose:2nd largest

player in thecountry

Dabur Honey: Largestbranded honey in thecountry; growing

category through replacesu ar strate

Market Share Key B rands

Diges t i ves

17

17Value Share-ACN MAT Mar, 2011 for Herbal Digestives

Hajmola: Flagship brand

for branded Digestives

Hajmola tasty

digestive candy


18/28

HEALTH CARE CATEGORIES

an t ca s

OTC com pr ises:

Generics

ETHI CAL com pr ises:

Tonic OTC Healthcare is Rs.130 billion size

OTC Heal t hcar e Focu s

Branded Products Classicals

Branded Ethicals

industry

Expected to grow at 14-15% p.a. aspreference for Over-the-Counter productsaccelerates

Consolidating / expanding currentportfolio

Launching new products inemerging therapeutic areas

Honitus: Day & Nightfor Cold and Flu relief

Pudin Hara LemonFizz for digestion

Look at inorganic opportunities

Acq u ir ed t he en er gizer b ran d, Th ir t yPlu s f r om Aj an t a Ph ar m a in May 2 0 1 1

18

18

Promoting Dabur Ayurveda: Generating

equity for Ethical portfolio


19/28

FOODS

Foods portfolio comprises Juices and Culinary range

Juices are under the brands Real, Activ and Burrst

Foods

Cu inary range is un er Homma e ran


Company Est. Mar, 2010 for Fruit Juice category Real: Flagshipbeverages brand

Real Activ: Rangeof 100% pure juice

19

19


20/28

INTERNATIONAL BUSINESS DIVISION

Starte as anExporter

Focus on Orderfulfillment throughIndia Mfg.

Set up a ranc isee atDubai in 1989

Demand generationled to setting up ofmfg in Dubai & Egypt

Rename ranc isee as Da urInternational Ltd

Local operations further strengthened

Set up new mfg facilities in Nigeria,RAK& Bangladesh

Bui ing sca e-22% ooverall Dabur Sales (FY11)

High Levels of Localization

Global Supply chain

1 9 8 0 s Ear ly 9 0 s 2 0 0 3 On w ar ds Tod ay

Hig h l ig h t s Hig h Gr ow t h in I BD

4,770

6,025

8,922

5000

6000

7000

8000

9000

10000

a ur s overseas us ness con r u esto consolidated sales led by CAGR of 32% inlast 6 years

Focus markets:

GCC

in Rs . m i l l ion

1,2811,807

2,2582,917

,

0

1000

2000

3000

4000


Egypt

Nigeria

Turkey

Bangladesh

U.S. High level of localization of manufacturing

and sales and marketing

Leveraging the Natural preference among

20

20

N ew p r o d u ct s c o n t r i b u t i n gs ign i f i cant ly to o verseas sa les

oca consumers o ncrease s are n personacare categories

Sustained investments in brand building andmarketing


21/28

OUR STRATEGY

Three p ronged Grow th St r a tegy

Expand I n n ov at e Acq u i r e

Our d i f f e ren t i a t i on i s t he h e rba l and ayu rved ic p lat f o r m

Expand

Strengthening presence in existing categories and markets as well entering new geographies

Maintain dominant share in categories where we are category builders like HealthSupplements, Honey etc. and expand market shares in other categories

Calibrated international ex ansion local manufacturin and su l chain to enhance flexibilit/ reduce response time to change in market demands

I n n o v a t e

Strong focus on innovation. Have rolled out new variants & products which have contributed toaround 5-6% of our rowth .a.

Renovation of existing products to respond to changing demands (Toothpowder to Toothpaste)

Acqu i re

Acquisitions critical for building scale in existing categories & markets

21

21

Should be synergistic and make a good strategic fit

Target opportunities in our focus markets


22/28

ACQUISITION OF HOBI GROUP, TURKEY

Acquisition of Hobi Group, Turkey for a totalconsideration of US$ 69 Million completed onOctober 7, 2010

Hobi manufactures and markets hair, skin andbody care products under the brands Hobby

and New Era Product range of the company is

complementary to our product range

Acquisition provides an entry into anotherattractive emerging market and a goodplatform to leverage this across the region

22

22


23/28

ACQUISITION OF NAMASTE LABORATORIES LLC.

Dabur India Limited through its subsidiary Dabur International Limited acquired 100% stakein Namaste Laboratories LLC for $100 million, in an all-cash deal on January 1, 2011

Namast is a leading ethnic hair care products company, having products for women ofcolour, with revenues of $95 million from US, Europe, Middle East and African markets

The company markets a portfolio of hair care products under the brand Organic Root

Stimulator and has a strong presence in ethnic hair care market for women of colour. Acquisition to enable entry into Ethnic Hair Care products market valued at more than US$1.5

billion and tap into significant market opportunity in the fast growing, hugely populated (~1n ye g y un erpene ra e consumer mar e s o u a aran r ca

At an acquisition price of $100 million, the deal value is at 1.1x Sales and 8.3x EBITDA

23

23


24/28

RECENT FINANCIAL PERFORMANCE

1,9392000

2500

9 244

12,16212000

14000

Sales: Q1 FY12 v / s Q1 FY11

in Rs . m i l l ion

EBI TDA: Q1 FY12 v / s Q1 FY11

in Rs . m i l l ion

,

0

500

1000

1500

0

2000

4000

6000

8000

10000

Q1 FY11 Q1 FY12Q1 FY11 Q1 FY12

1,217

1150

1200

1250

PAT: Q1 FY12 v / s Q1 FY11

in Rs . m i l l ion

Sales for Q1 FY12 increased by31.6%, largely driven by acquisitionsand volumes

EBITDA increased b 27.8% des ite1,068

95 0

1000

1050

1100

input cost inflation PAT grew by 19.6%

24

24


25/28

STOCK PERFORMANCE AND SHAREHOLDING PATTERN

FIIs 17.4 Indian

Shareho ld ing St ru c tu re*Market Cap i ta l i za t ion in Rs. b i l l i on

190

FIs/

MFs/Ins.

Cos., 7.1%

,

%

Public andOthers, 6.7

%

17

romo ers,

68.7%

2001 2011

*As on May 6, 2011

D ab u r r a n k ed a s t h e o r a n iz at i o n t h at o f f er s t h e b es t r et u r n t o i n v e st o r s b

the 6 th Soc ia l & Cor po r a t e Gover nance Aw ar ds , p r esen ted b y t he Bom bayStock Exchan ge

25

25


26/28

CONSOLIDATED P&L

InRs.million Q1FY12 Q1FY11 YoY(%)

GrossSales 12,162 9,244 31.6%

Less:Excise Duty 117 79

NetSales 12,046 9,165 31.4%

.

MaterialCost 6,290 4,346 44.7%

%ofSales 51.7% 47.0%EmployeeCosts 951 728 30.6%%ofSales 7.8% 7.9%

, , .

%ofSales 12.5% 16.3%OtherExpenses 1,583 1,217 30.1%

%ofSales 13.0% 13.2%Other

Non

Operating

Income 151 73 108.7%

EBITDA 1,939 1,517 27.8%

%ofSales 15.9% 16.4%InterestExp.andFin.Charges 126 36 253.8%

Depreciation 154 135 14.2%

Amortization 57 10 472.7%

ProfitBeforeTax(PBT) 1,602 1,337 19.8%

TaxExpenses 323 263 22.7%

PAT(Beforeexceptionalitem) 1,279 1,074 19.1%

%ofSales 10.5% 11.6%PAT(AfterexceptionalItems) 1,279 1,074 19.1%

26

26

MinorityInterest (Profit)/Loss 0.2 0.6

PAT(AfterExtraordinaryitem&MinorityInt) 1,277 1,068 19.6%


27/28

CONSOLIDATED BALANCE SHEET

I n Rs. m i l l ion As on Ju n 1 1 As on Ju n 1 0

Sources Of Fund s

Shareho lders ' Fund :

Share Capital 1,741 869

Reserves & Surplus 13,534 10,195

15,275 11,064

Minority Interest 43 44

Loan Funds:

Secured Loans 4,762 1,387Unsecured Loans 5,349 10,111 830 2,217

Deferred Tax Liabilit 221 150

TOTAL 2 5 ,6 5 0 1 3 ,4 8 0

App l i ca t i on o f f unds :

F ixed Assets:

Gross Block 19,520 10,158, ,

Net block 15,011 6,665

Capital WIP 654 246

I n v e s t m e n t s 3,105 2,100

Curr ent Assets , Loans & Advan ces

Inventories 7,522 5,139

, ,

Cash & Bank balances 3,619 3,104Loans & Advances 5,464 20 , 147 4,532 14 , 344

Less: Cur r en t L iab i l i t i es and Prov is ions:

Current Liabilities 6,543 5,583

Provisions 7,655 4,979

27

27

, ,

Net Cu r r en t Asset s 5 ,9 4 9 3 ,7 8 2

Miscellaneous Expenditure 931 682

Deferred Tax Assets

TOTAL 2 5 ,6 5 0 1 3 ,4 8 0


28/28

Investor Relations

Dabur India Ltd

Contact:+91-11-42786000

28

28

DIL-Inv Pres Merrill Lynch India Investor Forum Sept-11

Documents

Transcript of DIL-Inv Pres Merrill Lynch India Investor Forum Sept-11