Investors Q1 0607

8/8/2019 Investors Q1 0607

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ITC LIMITEDITC LIMITED

8/8/2019 Investors Q1 0607


ITC - Financial Snapshot

(Rs. 1 crore = Rs. 10 million)

Rs. Crs.

1995-96 2005/06 10-Ye rgr %

GRO URNOVER 5115 16224 12.2

NET TURNOVER 2536 979114.5

MARKET CAPITALISATION 5571 73207 * 29.4

PBDIT 584 3613 20.0

PBIT 536 3281 19.9

PBT 452 3269 21.9

PAT (before exceptional items) 261 2280 24.2

EPS (Rs.) - before exceptional items 0.7 6.1 24.0

NETWORTH 1121 9061 23.2

CAPITAL EMPLOYED 1886 9506 17.6

ROCE (%) 28.4 34.5

Book Value Per Share ( Rs. ) 3.0 24.1 23.0

Total Shareholder Returns % 30.3

* Market Capitalisation as on 31/3/06

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2005-06 Financials


Rs. s

2005-06 2004-05 G oly %

Gr r v r t r l 21.5

Net r ver ter l 28.2

t l F r ex r i g38.9

I 19.3

I 20.8

22.3

24.1

- fter xcepti l Items 2.0

pit l mpl yed 9506 8517 11.6

Segment pit l mpl yed 6295 5388 16.8

EPS ( s.) - ef r e Excepti nal Items 6.08 4.91 23.8

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S m nt v nu s 2005/06


R s. rs

1. Se e R e e e

a FMCG - Ciga e es 13.3

- Othe s 79.9

Total FMCG 12343 10566 16 .8

b) Hote s 3 577 35.7

c) Agri Business 2678 1780 50.5

d) Pa erboards, Pa er & Pac aging 1896 1565 21.1

Total 17701 14489 22.2

Less : Inter segment r e enue 1476 1139 29.6

Gross sales / income f rom operations 16224 13350 21.5

2005-06 2004-05 Goly (%)

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S m nt sults 2005/06


R s. Crs

2. eg e t esults

a) MCG - i arettes 2709 2289 1 .3

- Others (172) (195) -

Tot l G 2537 2094 21.2

b) Hote s 258 141 83.1

c) A r i Busi ess 91 96 (5.8)

d) Paperboards, Paper Packa i 351 280 25.5

Tot l 3237 2611 24.0

Less : i) Interest (Net) 12 42 (71.9 )

ii) Other un-a ocab e expenditure (44) (105) -

et of un-a ocab e i come

Prof it Before Tax 3269 2673 22.3

2005-06 2004-05 Goly ( )

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S m nt Capital mploy d ± 2005/06


* Before consid er ing provi sion of Rs. 426 crs ( 31.03.05 ± Rs. 337 crs ) in respect of

di sput ed St t e t xes, the l evy / coll ection of which h s been st yed .

Rs. C rs

3. Cap a E p oyed

a F CG C ga e es * 1463 1240 18.0

O he s 489 262 86 .5

To a F C 1953 1502 30.0

b Ho els 1374 1401 (1.9)

c Ag Bus ness 1060 740 43.3

d Pape boa ds, Pape Packag ng 1908 1745 9.3

To a Seg en Cap a E p oyed 6295 5388 16 .8

2005 06 2004 05 Go

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ITC ± K y Financials ± Q1 2006-07

Q1 06/07

Act als

Q1 05/06

Act alsGol y

ross T rnov r xt rnal 4634 3876 19 6

Net r over xter al 2850 2267 25.7

PBDIT 1056 911 15.8

PBIT 968 831 16.4

PBT 967 830 16.5

PAT 652 558 16.8

Ca ital loye 10350 8972 15.4

Se e t Ca ital loye 6869 5226 31.4


Rs. rs

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On of th 8 Indian Compani s to f eat r e in µFo b s A-list¶ f or 2004 Feat ring 400 of t e World¶s µ best big co panies¶ wit -ca p. > 5 bln.

ar e r ated as t e µmost attr active com panies f or investor s¶

Only Indian F C Company to f eat r e in Fo b s 2000 List

A com pr ehensive r ank ing of world¶s biggest com panies measur ed by a

com posite of sales, pr ofits, assets & mar k et value

Among top in :

Sustain d valu c ation (BT- ter n tewart survey)

Op ating p of its

Cash Prof its

R ank s No. 8 among Indian listed Com panies by market cap.(@30/06/06)

No. 1 in F C Sector; 6th amongst Private Sector

R ated as one of India¶s ost espected Companies (I R B-Businessworld

urvey 2006)

ITCOne of India¶s most valuable corporations

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Accolades & Awards (1)

olden Peacock Global Award f or Cor por ate Social R es ponsi bility in

merging economies f or 2005 by World Council f or Cor por ate Gover nance

f or the e-choupal and social & f arm f orestry initiatives

2005 Golden Peacock Award f or xcellence in Cor por ate Gover nance

ITC Centre,Gurgaon awar ded Platinum Green building rating by SGr een Building Council - eader shi p in nergy and nvir onmental esign

± largest latinum r ated building in the world; 7th such building in the world

Bhadrachalam paperboard unit :

± adjudged µGreenest paper mill in India¶ by The Centr e f or Science &

Envir onment; won the Greentech nvironment xcellence Gold Award

µJohn Players¶ adjudged the µMost Admired Shirt Brand of the Year¶ at

the Lycr a® Images Fashion Awar ds (LIFA) awar ds in Jan¶06

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ITC - Business Portf olio

ITC

FMCG:CIGARETTESOTHER FMCG

HOTEL S

AGRI BUSINESSLEAF TOBACCO

AGRICOMMODITIES

PAPERBOAR D

PAPER &PACKAGING

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Strategy of Organisation to manage diversity

of Portf olio

Formal 3-tiered governance structure:

Board of Directors :

Com prising executive (4) and non-executive dir ector s (8)

Str ategic su pervision

Corporate Management Committee :

Com prising executive dir ector s and senior manager s

Str ategic management

C O & Divisional Management Committee :

Executive management

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Sustain multiple drivers o

f growth, matching internal capabilities

with emerging market opportunities

Pursue World class competitiveness in all businesses and across

the entire value chain

Best-in-class in terms of :

Inter nal itality

ar k et Standing

Pr ofita bility

Strategy of Organisation and Governance processes geared to

manage multiple businesses

Blend core competencies and leverage ITC umbrella strengths to

create new avenues of growth

Corporate Strategies

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ITC¶s Cigarettes BusinessITC¶s Cigarettes Business

Market leadership

Powerf ul brands across segments

Leadership in all segments - geographic & price

Extensive FMCG distribution network Direct servicing of 85000 markets & nearly 2 million

retail outlets

World-class state-of -the-art technology and products

Investment - s.10 billion in six years

Exciting long term growth potential

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Cigarettes: Growth potential

Cigarettes account f or only 14% of tobacco consumed in India

unlike world pattern of 85% due to prolonged punitive taxation

Cigar ettes (14% of tobacco consum ption) contri bute nearly 85% of

R evenue to the Exchequer fr om tobacco sector

Of the 58% of adult Indian males who consume tobacco, barely

15% can aff ord cigarettes

Biri : Cigarettes ratio = 10 : 1

Annual per capita adult cigarette consumption in India is appx. onetenth world average : 141

Future growth depends on relative rates of growth of per capita

income and moderation in taxes

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Source : Based on Cigarette consumption data(2003) f rom

³World Cigarettes´,ER C Group plc.

Per C apita Adult Cigarette C onsum ption

(Sticks)

16621753

561488

141

1190

U SA C hina Pakistan N epal Ind ia W orld Avg.

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Hotels & TourismHotels & Tourism

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Hotels & Tourism industryHotels & Tourism industry

Foreign arrivals into India - 3.9 million appx. vs 31 million

in China

The two nations were on par 2 decades ago at 750,000

arrivals

Today, Beijing alone has as many hotel rooms as the whole

of India

India¶s luxury rooms availability lower than even smallerEast Asian countries

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Luxury hotel roomsLuxury hotel rooms -- East AsiaEast Asia

0

10000

20000

30000

40000

50000

60000

70000

80000

H o n g K o

n g

B a n g k

o k

S i n g a p o r e

M a l a y s i a

I n d i a

Source: Compendium of Tourism statistics, WTO

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Indian hotel industryIndian hotel industry

Current supply ± appx. 100000 rooms of which 5 Star

category accounts f or less than 30%

India needs 130000 rooms to service 5 million tourists ± a

f igure expected t o be reached by 2007

Present mismatch between supply and demand expected to

persist over the short term

As inf rastructure f or trade & commerce improves - growing

potential f or leisure tourism

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ITC¶s Hotel BusinessITC¶s Hotel Business

ITC-Welcomgroup : a leading hotel chain in India

Str ategy to esta blish pr esence in k ey business locations to

com plete the chain achieved in end 2004

Over 5200 r ooms under 4 distinct br ands

Fastest gr owing hotel chain with highest operating eff iciency

(PBDIT/ et Income @ 41%) amongst the 3 leading chains

Leverages unique service proposition and international

alliance with Sheraton

Large tax advantages on investments on ITC Balance Sheet

Attractive medium / long term prospects

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ITC¶s Hotel properties

ITC Hotel aurya Sher aton & Tower s, ew Delhi

ITC Hotel Gr and ar atha Sher aton & Tower s,Mum bai ITC Hotel Sonar Bangla Sher aton,Kolk ata

ITC Hotel Gr and Centr al,Mum bai

ITC Hotel Windsor Sher aton & Tower s,Bangalor e

ITC Hotel K ak atiya Sher aton & Tower s,Hyder a bad (thr u¶ a 68% holding

in Srinivasa R esorts Ltd.)

ITC Hotel Par k Sher aton & Tower s ,Chennai (managed pr operty)

WelcomHotel R a jputana Palace Sher aton,Jai pur

WelcomHotel Chola Sher aton, Chennai

WelcomHotel Mughal Sher aton,Agr a

WelcomHotel, ew Delhi

WelcomHotel R ama Inter national , Aur anga bad

WelcomHotel adodar a (thr u¶ associate com pany)

WelcomHotel ew Delhi

WelcomHotel Gr and Bay,Visak ha patnam (managed pr operty)

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ITC¶s Hotel Business

Manages 15 f ull service mid-market properties under the

Fortune Hotels brand

± 100% subsidiary company : Fortune Park Hotels Ltd.

Also operates 35 properties under the µWelcomHeritage¶

brand

± Maharaja Heritage Resorts Ltd. 50% JV with Marudhar

Hotels (P) Ltd.

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Paperboards, PaperPaperboards, Paper

&&

Pack agingPack aging

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Indian paperboard marketIndian paperboard market

Annual paperboard demand ± appx. 1.1 million tonnes

Fragmented capacity & obsolete technology

Low per capita usage at around

6k gs p

.a

.(world average ±

over 50 k gs p.a.)

Indian paperboard market growing at 7% p.a.

Value Added Coated board - the f astest growing segment

(20% p.a.) in India driven by the growing sophistication of

the consumer

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Paperboard Demand Projections - Asia

Asian region demand (excluding Japan) growing by 0.5

million tonnes per annum

This region expected t o be a net importer by

2006

Signif icant export opportunities f or high quality Indian

manuf acturers

ITC pa per boar ds exports - R s. 2 billion a ppx.

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ITC¶s Paperboards & Pack aging businessesITC¶s Paperboards & Pack aging businesses

Capacity expansion in recycled segment

Acquisition of Kovai nit in Mar ch 2004: +65000 TPA

Another 75000 TPA commissioned in Jan µ05

ITC¶s pack aging SBU -India¶s largest converter of

paperboard into high quality printed pack aging

Leading su pplier to Indian FMCG segment

Pr ovides su perior pack aging solutions to the cigar ettes and

new FMCG businesses

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Agri BusinessesAgri Businesses

-- Leaf TobaccoLeaf Tobacco

-- Agri CommoditiesAgri Commodities

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Indian Leaf Tobacco industryIndian Leaf Tobacco industry

India ± the third largest producer of tobacco

However, India¶s share is only 7% in world tobacco trade

Upgradation of tobacco consumption f rom other f ormats

to cigarettes will enable:

gr owing domestic base

larger opportunities f or value added exports

ITC ± India¶s largest buyer, processor, consumer &

exporter of cigarette tobaccos

Pioneering cultivation of f lavourf ul Flue-cured, superior

Burley and Oriental tobaccos in India

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ITC¶s Agri Commodity Exports

Farm link ages in 14 states covering Soya, Wheat, R ice,Marine products, Edible nuts, Coff ee

Unique CR M programme in commodity exports

Leveraging IT f or the transf ormational µe-Choupal¶

initiative

R ur al India¶s largest Inter net- based intervention

Over 36000 villages link ed thr ough ar ound 6300 e-Chou pals

servicing over 3.5 million f ar mer s ± 10 µChou pal Saagar s¶ oper ational; 9 mor e to be launched

shortly (40 nos. over the next 18 months)

Distinctive sourcing capability f or ITC¶s Foods business

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e-Choupal - Recognition

Stock holm Challenge Award 2006 ± Economic Development

Category

World Business Award ± ICC-UNDP

Enterprise Business Transf ormation Award -Wharton Inf osys

Harvard Business School ± case study

Showcased at ICT4D*, Geneva ± UN

* I nformation and Communication Technologies for Development

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ITC¶s strategic thrustITC¶s strategic thrust

Cost-eff ective extension services to enhance f arm productivity

and quality, and better align f arm produce with requirements

of the market, both domestic and international

Enhances com petitiveness of ITC agri-sour cing

Create e-inf rastructure to serve as transaction back bone

Pr ovides ITC two-way f ulfilment ca pa bility in and out of r ur al

mar k ets f or a r ange of goods and services

R ur al mar k eting initiatives being scaled u p pr ogr essively

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Future Growth & Value Capture

New FMCG Initiatives

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FMCG Business Initiatives

Branded Pack aged Foods

Leverages:Unique Agri sour cing sk ills

ITC Welcomgr ou p¶s s pecialist cuisine & bak ery knowledge

FMCG distri bution synergies

ITC R &D Centr e, Bangalor e

4 chosen categories:

Staples

± Aashirvaad Atta, Salt, S pices

Snack Foods

± Sunf east BiscuitsConf ectionery

± Candyman, Mint-o

Ready to Eat

± K itchens of India, Aashirvaad R eadyMeals, Aashirvaad Instant Mix,

Sunf east Pasta

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Branded Pack aged Foods

Aashirvaad Atta:

± Current market leader amongst national branded

players; leverages the e-choupal network f or cost-quality

optimisation and region specif ic off erings

Sunf east Biscuits:

± Diff erentiated & innovative products; continues to build

consumer f ranchise; distributed & outsourced supplychain being ramped up

Number of innovative products in the pipeline leveraging the

capabilities of the ITC R &D Centre

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Lif estyle Retailing

Leverages trade mark and services expertise of hotels

Relaxed wear market growth > 25% p.a

Upmarket product range available in exclusive Wills

Lif estyle stores and multi-branded outlets/ large f ormat

retail stores across the country

State-of -the-artMaster Facility aids speed of execution

Outsourced JIT plant f or µquick response¶ manuf acturing

Product and brand range being expanded

Pr emium segment com prising the µClassic¶ r ange of f or mal

wear , µWills S port¶ r elaxed wear and µWills Clu blif e¶

evening wear

Str ong distri bution networ k in place f or the mid-mar k et

br and µJohn Player s¶

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Greetings, Gif ting & Stationery

Leverages print and paper k now-how

An emerging market in India - growth driven by increasing cross-

cultural exposure

ITC¶s

µEx pressions¶ range commenced with greeting cards; now

widened to include stationery & gif t wraps

Distribution network being strengthened to scale up the Stationery

business signif icantly

µClassmate¶ brand already the most widely distributed brand in India

Serves to expand the width of ITC¶s FMCG distribution capability with

negligible incremental investment

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Saf ety Matches

Current industry consumer spend estimated at R s. 1250 crores p.a.

f or 24 billion match boxes

Fragmented supply base arising f rom policy of reservation f or

small scale industry

ITC markets its brands with value added products across each

price point

Su pport SMEs with com plementary mar k eting str engths

µAIM¶ ± India¶s largest selling Saf ety Matches brand

Successf ul acquisition of WIMCO Ltd. by R ussell Credit

(shareholding as at 30/06/06: 93.84%)

K ey brands:

Homelites, Ship, Cheetah Fight etc

.

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Incense stick s (Agarbattis)

Current industry consumer spend estimated at over R s. 900

crores p.a.

Fragmented supply base arising f rom policy of reservation

f or small scale industry

ITC markets its brands with value added products across

each price point

Su pport cottage sector with com plementary mar k eting

str engths

µMangaldee p¶ : the only ational br and in the country

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Future Positioning of ITC

A leading FMCG player in India

F

A

R

M

E

R

S

M

A

R

K E

T

S

Cigarette Trade Marketing capability

BRANDEDFOODS

EXPANDED FMCG DISTRIBUTION CAPABILITY

E-CHOUPAL RURAL TWO-WAY FULFILLMENT CAPABILITY

BASIS FOR STRATEGIC PARTNERSHIPS WITH OTHER FMCG BRAND OWNER

VPN PROVIDING SCM, ERP & CRM CAPABILITY

LIFESTYLE RETAILING

GREETINGCARDS/ST ATIONERY

MATCHES &AGARBATTI

S

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Forward-look ing Statements

STATE MENTS IN THIS PR ESENTATION DESCRIBING THE CO MPANYS OBJECTIVES, FUTURE PROSPECTS, ESTI MATES, EXPECTATIONS ETC. MAY BE |F ORWARD L OOKING STATE MENTS} WITHIN THE MEANING OF APPLICABLE SECURITIES LAWS AND REGULATIONS. INVESTORS ARE CAUTIONED THAT | FORWARD LOOKING STATE MENTS} ARE

BASED ON CERTAIN ASSU MPTIONS OF FUTURE EVENTS OVER WHICH THE CO MPANY EXERCISES NO CONTROL. THEREFORE THERE CAN BE

NO GUARANTEE AS TO THEIR ACCURACY. THESE STATE MENTS INVOLVE A NU MBER OF RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER

MATERIALLY FRO M THOSE THAT MAY BE PROJECTED OR I MPLIED BY THESE FORWARD LOOKING STATE MENTS. SUCH RISKS AND UNCERTAINTIES INCLUDE, BUT ARE NOT LI MITED TO : GROWTH, CO MPETITION, ACQUISITIONS, DO MESTIC AND INTERNATIONAL ECONO MIC CONDITIONS AFFECTING DE MAND, SUPPLY AND PRICE CONDITIONS IN THE VARIOUS BUSINESSES IN THE CO MPANYS PORTFOLIO CHANGES IN GOVERNMENT REGULATIONS TAX

Investors Q1 0607

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