MS Investor Presentation Jun 2011 v1
Transcript of MS Investor Presentation Jun 2011 v1
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D ABUR INDIA LIMITED
June 2011, Mumbai
Morgan Stanley - India Summit
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FMCG GROWTH STORY
India FMCG Sector – Volume and Value Growth Rate (Y-o-Y % )
High Growth Phase
Source: Industry data, Standard Chartered Research
India’s FMCG sector reported steady sales CAGR of 11.2% over FY00-10 on theback of strong annual volume growth of ~8.5%.
,changing lifestyles and favorable demographics
As per a recent study conducted by Booz & Company, FMCG sector is expectedto grow in the range of 12% to 17% upto 2020 and would touch a market size
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between of Rs. 4,000 to Rs. 6,200 billion
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FMCG – CURRENT SCENARIO
FMCG Split: OTC, Food and Non-Food FMCG industry pegged at US$30billion in CY10
140,000 128,580Rs. Crores
e en re sec or, oo s52%, Non-Food at 45% and OTC 3%
Rural sector accounts for about 33%of total revenue
80,000
100,000
120,000
OTC
PRODUCTS
Non‐Food
(11%)
(8%)
(14%)
(19%)(10 %)
(14 %)
82,615
97,276
,
46
46
45
4
4
4
3
FMCG Sales – Channel Breakdown
20,000
40,000
60,000 Food Products
(14 %)(20 %)
(22%)48
48
50
5052
Source: AC Nielsen
0
MAT Sep'07 MAT Sep'08 MAT Sep'09 MAT Sep''10
5.8%
3.3%
5.0%
5.9%
Of the 7.8 million retail outlets forFMCG, Grocers are the dominant
format
58.6%
13.2%
8.2%
Modern Trade contributes to 6%of FMCG sales
Grocers General Stores Chemists
Paan Plus Food Stores Others
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Source : AC Nielsen
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PENETRATION LEVELS: SUFFICIENT HEADROOM
80%
90%
Rural Penetration Urban Penetration
67%
57% 59%60%
70%
80%
42%
37%
32%30%
40%
50%
18% 18%
3% 2%4%
19%
5%10%
20%
0%
Toothpaste Shampoo Hair Oil Skin
Cream
Mosquito
Repellants
Instant
Noodles
Hair Dyes Floor
Cleaners
Source: Industry Data
Low penetration levels offer room for growth across consumption categories Rural penetration catching up with urban penetration levels
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PER CAPITA CONSUMPTION: ROOM FOR GROWTH
Skin Care – Per Capita Consumption (in US$) Shampoo – Per Capita Consumption (in US$)
India has low per capita consumption as compared to other emerging economies
7.4 7.7
5
6
7
8
9 2.72.4
2
2.5
3
in US$in US$
3.2
0.80.3
0
1
2
3
4 1.0 1.1
0.3
0
0.5
1
1.5
China Indonesia India Malaysia Thailand China Indonesia India Malaysia Thailand
Toothpaste – Per Capita Consumption (in US$)
2.9
2.02
2.5
3
3.5in US$
0.5
1.0
0.4
0
0.5
1
1.5
5
5
Source: MOSL
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DABUR OVERVIEW
Established in 1884 - more than 125 Yearsof Trust & Excellence
Eleven Billion Rupee Brands
World’s largest in Ayurveda and natural
healthcare. .
Rs. 5.7 billion in FY2010-11
Strong brand equity
Vatika and Real are Superbrands
Hajmola , Real & Dabur ranked amongIndia’s Most Admired Brands
11 Brands with sales of over Rs. 1 billioneach
Wide distribution network covering 2.8m on re a ers across e coun ry
17 world class manufacturing plantscatering to needs of diverse markets
Dabur ranked200 in theFortune India500 list
Dabur movesup to take the78th spot in theSuper-100list, released by
Dabur rankedamong MostTrusted Brands inIndia, according toBrand Trust
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rong overseas presence w
contribution to consolidated sales
Business India Report, IndiaStudy, 2011
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FINANCIAL PERFORMANCE
Sales
i n Rs . m i l l i on
12,004 12,849 12,356 14,170 17,565
20,80323,963
28,34134,158
,
15000
20000
25000
30000
35000
40000
45000
0
5000
FY02 FY03 FY04^ FY05 FY06* FY07 FY08 FY09 FY10** FY11^^
in %
EBITDA Margin (in % ) Net Profiti n Rs . m i l l i on
2,142 2,8173,329
3,9135,032
5,686
30004000
5000
6000
13.3%
15.3%
17.1%18.1% 18.5% 18.3%
. .
14.0%
16.0%
18.0%
20.0%
.
, ,
0
1000
2000
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
10.0%
12.0%
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
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^Sales show a decline in FY04 on account of de-merger of Pharma 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 topline in FY11
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GLOBAL FOOTPRINT
UK
Turkey
U.S.Egypt
UAENepal
B’Desh
Nigeria
Domestic Mfg.Locations
Manufacturing Facilities
Key markets
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,and product offerings to suit consumer requirements
in each geography
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ROBUST DISTRIBUTION NETWORK
Factory
C&FA
(Carry & Forward Agents)
oc s uper oc s Institutions& Modern
trade
Wholesalers Sub Stockist
RETAIL TRADE
CONSUMERS
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Direct + Indirect Reach covering c.3 million Retail Outlets
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PRESENCE IN FMCG CATEGORIES
Market SharePosition Key BrandsCategory
Hair Care
Oral Care
12%3Dabur Amla hair Oil, Vatika hair oil & Vatika Shampoos
13%3 Red toothpaste, Babool, Meswak, Red
7%3 Dabur Gulabari, Fem, Dabur UvedaSkin Care
AyurvedicTonics 67%1 Dabur Chyawanprash
Fruit Juices 52%1 Real Fruit Juices, Real Activ
Honey 1 50% Dabur Honey
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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
ucose a ur ucose
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BUSINESS STRUCTURE
Dabur operates through three focused Strategic Business Units
Business Unit Description
FMCG ortfolio com risin four
RevenueShare
Consumer CareDivision
distinct businesses:• Personal Care• Consumer Health Care• Home Care
68%
Consumer HealthRange of ethical and OTC products
- Division Ayurveda in modern ready-to-use
formats
InternationalBusiness
Catering to health & personal careneeds of customers across differentinternational markets spanningMiddle East, North & West 22%
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, ,through its brands Dabur and Vatika
Note: Percentage share in revenue based on FY11 Financials ; Hobi and Namaste included in International Business Division
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CONSUMER CARE DIVISION OVERVIEW
HCPDFPD Balsara Foods FEM
FPD: Family Products Division
2003-2004 2006-2007 2007-2008 2008-2009
HCPD: Health Care Products Division
Balsara and Fem were acquisitions
Foods division was a 100% subsidiary of DIL
i n Rs . mi l l i on
CCD Sales - HistoricalCategory-wise Share of CCD Sales
Home
10,158 12,250
14,01316,392
18,65820,301
23,265
27,912
15000
20000
25000
30000Hair Care28%
Skin Care6%
Care
6%
oo s15%
0
5000
10000
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Oral Care17%
HealthSuppleme
nts20%
8%
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Note: Percentage share based on revenue for FY11
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CONSUMER CARE CATEGORIES
Market ShareKey Brands
Hair Oil
8%15%
42%
30%
5%
Bajaj Dabur Marico Emami Others
Dabur Amla: Vatika: Value added Anmol Hair Oil:
the portfolio
-
Ke Brands
Shampoo
10%6%
14%
Market Share
46%
Cavinkare Dabur HUL
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P&G Others
Vatika range of shampoosValue Share-ACN MAT Dec-2010
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CONSUMER CARE CATEGORIES
14.0%
Market ShareKey Brands
Oral Care
50.0%
13.0%
23.0%
Colgate HUL Dabur Others
Value Share -ACN MAT Mar, 2011
Dabur Red: Toothpaste& Toothpowder
Babool: Targeted ateconomy segment
Meswak: Premiumtherapeutic
Chyawanprash – Market Share Key Brands
Health Supplements
13.4%
66.8%
6.6%
2.7%10.5%
Baidyanath Dabur Emami
Zandu Others
Dabur Honey: Largest
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14
Volume Share-ACN MAT - Mar, 2011
Largest selling health
supplement in thecountry
a ur ucose:2nd largestplayer in thecountry
branded honey in the
country; growingcategory through replacesugar strategy
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CONSUMER CARE CATEGORIES
Market ShareKey Brands
Foods
52.0%13.0%
35.0%
Dabur Pepsi Others
Real: Fla shi Real Activ: Range
Market Share*
ompany st. ar, or ru t u ce category
beverages brand of 100% pure juice
Ke Brands
Skin Care
58.9%
6.4%
3.2%
18.0%
6.8%
6.6%
Hindustan Lever Emami Dabur
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Loreal Cavin Care Others
*Company estimates;Includes Fem skin care portfolio
based skin care
products:Moisturizer, Facefreshener & Rose water
Fem Go B eac :Launched recently
Ayurvedic Skin
Care
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CONSUMER CARE CATEGORIES
Market Share Key BrandsDigestives
56%
8%
Hajmola Satmola Others
Value Share-ACN MAT Mar 2011 for Herbal Di estives
Hajmola: Flagship brandfor branded Digestives
Hajmola tastydigestive candy
Market ShareKey Brands
Home Care
69%12%
19%
Odomos Good Knight Others
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Value Share-ACN March, 2011 for Mosquito
Repellants Cream category
range: Largest brand
in the portfolio
repellant skin cream
Toilet cleaner
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CONSUMER HEALTH DIVISION
Description
CHD: Repository of Dabur’s AyurvedicHealthcare knowledge
CHD Structure
Focusing on multiple therapeutic areas.
Distribution coverage of 200,000
chemists, ~12,000 vaidyas & 12,000
OTC 64%
Generics
Branded Products
ETHICAL 36%
Tonic
Classicals yurve c p armac es
Focus on growing the OTC Health-Careportfolio aggressively
ran e ca s
OTC Healthcare is Rs.130 billion size
Healthcare Focus
Expected to grow at 14-15% p.a. aspreference for Over-the-Counter productsaccelerates
Honitus: Day & Nightfor Cold and Flu relief
Pudin Hara LemonFizz for digestion
Consolidating / expanding currentportfolio
Launching new products in
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Promoting Dabur Ayurveda: Generatingequity for Ethical portfolio
Look at inorganic opportunities
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INTERNATIONAL BUSINESS DIVISION
Started as anExporter
Focus on Orderfulfillment throughIndia Mf .
Set up a franchisee atDubai in 1989
Demand generationled to setting up of mf in Dubai & E t
Renamed franchisee as DaburInternational Ltd
Local operations further strengthened
Set up new mfg facilities in Nigeria,RAK
Building scale-22% of overall Dabur Sales (FY11)
High Levels of Localization
Global Supply chain
1980’s Early 90’s 2003 Onwards Today
8,9229000
10000
Highlights
Dabur’s overseas business contributes 22%to consolidated sales led by CAGR of 32% inlast 6 years
High Growth in IBD
i n Rs . mi l l i on
1,8072,258
2,9173,760
4,770
6,025
3000
4000
5000
6000
7000 Focus markets:
GCC
Egypt
Ni eria ,
0
1000
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Turkey
Bangladesh
Nepal
High level of localization of manufacturingand sales and marketing
Leveraging the “Natural” preference amonglocal consumers to increase share in personal
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significantly to overseas salescare categories
Sustained investments in brand building andmarketing
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OUR STRATEGY
Three pronged Growth Strategy
Our d i f f e ren t i a t i on i s th e herba l and ayu rved i c p lat f o rm
Expand Innovate Acquire
Expand
Strengthening presence in existing categories and markets as well entering new geographies
Maintain dominant share in cate ories where we are cate or builders like HealthSupplements, Honey etc. and expand market shares in other categories
Calibrated international expansion – local manufacturing and supply chain to enhance flexibility / reduce response time to change in market demands
Innovate
Strong focus on innovation. Have rolled out new variants & products which have contributed toaround 5-6% of our growth p.a.
Acquire
Acquisitions critical for building scale in existing categories & markets
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ou e synerg s c an ma e a goo s ra eg c
Target opportunities in our focus markets
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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
complementary to our product range
Acquisition provides an entry into anotherattractive emer in market and a oodplatform to leverage this across the region
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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
Namasté is a leading ethnic hair care products company, having products for women of colour, with revenues of about $93 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..
billion and tap into significant market opportunity in the fast growing, hugely populated (~1Bn) yet highly underpenetrated consumer markets of Sub Saharan Africa
At an acquisition price of $100 million, the deal value is at 1.1x Sales and 8.3x EBITDA
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RECENT FINANCIAL PERFORMANCE
19.8% 19.9%2 5 . 0 %
Sales: FY11 v/ s FY10
i n Rs . mi l l i on
EBITDA Margin: FY11 v/ s FY10
in %
5 . 0 %
1 0 . 0 %
1 5 . 0 %
2 0 . 0 %34,158,
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
4 0 0 0 0
0 . 0 %
FY10 FY11
0
5 0 0 0
FY10 FY11
PAT: FY11 v/ s FY10 Sales for FY11 increased by
5,032 5,686
4 0 0 0
5 0 0 0
6 0 0 0
i n Rs . mi l l i on . ,acquisitions
EBITDA margin was maintained
despite input cost inflation
0
1 0 0 0
2 0 0 0
3 0 0 0
FY10 FY11
PAT grew by 13.0% despite increase inin tax rate
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STOCK PERFORMANCE AND SHAREHOLDING PATTERN
Shareholding Structure*Market Capitalization in Rs. billion
FIs/
MFs/Ins.
Cos., 7.1%
FIIs, 17.4
%Indian
Public andOthers, 6.7
%
190
Promoters,
68.7%
17
*As on May 6, 2011
Dabur ranked as the organization that offers the best return to investors by
the 6th Social & Corporate Governance Aw ards, presented by the BombayStock Exchange
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CONSOLIDATED P&L
In Rs. crores Q4FY11 Q4FY10 YoY (%) FY11 FY10 YoY (%)
Gross Sales 1117.2 855.1 30.7% 4,109.9 3,415.8 20.3%
Less:Excise Duty 9.0 6.5 32.4 25.3
Net Sales 1108.2 848.6 30.6% 4,077.4 3,390.5 20.3%
Other Operating Income 7.4 9.7 ‐23.5% 33.0 25.3 30.8%
Material Cost 489.0 384.3 27.2% 1,905.3 1,550.8 22.9%
% of Sales 43.8% 44.9% 46.4% 45.4%
Employee Costs 91.5 75.4 21.3% 322.2 284.7 13.2%
% of Sales 8.2% 8.8% 7.8% 8.3%
Ad Pro 127.4 115.6 10.2% 534.6 493.5 8.3%
% of
Sales 11.4% 13.5% 13.0% 14.4%
Other Expenses 194.7 111.3 74.9% 560.7 432.4 29.7%
% of Sales 17.4% 13.0% 13.6% 12.7%
Other Non Operating Income 16.3 7.5 117.6% 32.1 23.0 39.9%
EBITDA 229.3 179.1 28.0% 819.8 677.3 21.0%
% of Sales 20.5% 20.9% 19.9% 19.8%
. . . . . . . .
Depreciation 18.7 13.1 43.2% 62.4 50.3 24.1%
Amortization 6.2 1.8 245.8% 19.2 5.9 223.6%
Profit Before Tax (PBT) 188.4 159.0 18.5% 707.9 600.9 17.8%
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Tax Expenses 41.4 25.8 60.4% 139.0 100.5 38.3%
Profit After Tax (PAT) 147.0 135.5 8.5% 568.6 503.2 13.0%
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CONSOLIDATED BALANCE SHEET
in Rs. crores As on Mar 11 As on Mar 10
Sources Of Funds
Shareholders' Fund:
Share Capital 174.1 86.9
Reserves & Surplus 1,217.1 848.5
1,391.2 935.4
Minority Interest 4.1 3.8
Loan Funds:
Secured
Loans 70.3 70.2Unsecured Loans 980.7 1,051.0 109.1 179.3
Deferred Tax Liability 18.9 10.7
TOTAL 2,465 1,129
Application of funds:
Fixed Assets:
Gross Block 1,933.7 985.7
less: Depreciation 435.1 339.1
Net block 1,498.6 646.6
Capital WIP 43.0 30.1
Investments 427.4 264.1
Current Assets,Loans & Advances
Inventories 708.5 426.2
Sundry Debtors 355.5 119.8
Cash &
Bank
balances 272.4 192.3
Loans & Advances 516.1 1,852.5 367.4 1,105.7
Less: Current Liabilities and Provisions:
Current Liabilities 714.0 466.9
Provisions 743.5 453.3
1,457.5 920.2
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Net Current Assets 395.0 185.5
Miscellaneous Expenditure 101.0 2.7
Deferred Tax
Assets
TOTAL 2,465 1,129
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Investor Relations
Dabur India Ltd
Contact:+91-11-42786000
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