POST RESULTS ROADSHOW

6 JUNE 2016

ANAND KRIPALUCEO & MD

AGENDA

THE OPPORTUNITY: INDUSTRY OVERVIEW

RISING INCOME LEVELS AND CHANGING CONSUMPTION DYNAMICS RE-SHAPED THE CONSUMER LANDSCAPE

Households

Affluent

Middle

Aspiring

Globally travelled

Seek luxury experiences

Brand conscious

Willing to pay price for increased value

Premium or Prestige Products.

Price conscious

Just entering the consumption cycle

Occasional consumers of prestige Products

There are not 1, but 3 distinct India’s

2%

2015 2025High % of millennialconsumers

Changing Attitudes leading

to higher spending habits

Increasing Regionalization

of Media

Rise of Digital

Changing consumer landscape

1%

9%1%

32%19%

36%43%

INDIA IS ~RS 41K CRORE TBA MARKET

7

11

16

291

1

2010 2015Beer Spirits Wine / RTDs

CAGR% 2010-15

20%

12%

9%

11%

24

41

One of the largest global Spirits markets

• 6% of global TBA growth driven by India

Strong growth opportunity

• ~25m consumers enter LDA+ every year

• Per capita consumption low and expected to increase as incomes rise

• Currently <2 alcohol LPA/head

• Increase to 3-4 alcohol LPA/head

• Social barriers to alcohol softening

Spirits is 70% of India TBA, lower taxes compared to beer

• 11% of global spirits growth will come from India

Rs k Crore

USL internal estimate

STRONG PREMIUMIZATION TREND IN SPIRITS

11.016.9

4.7

10.4

0.7

1.4

0.1

0.4

2010 2015

Popular Prestige Premium Luxury

Prestige & above NSV contribution

Prestige & above Profit contribution

33% 42%

52% 61%

CAGR%2010-15

33%Luxury

21%Premium

21%Prestige

9%Popular

16

29Rs k Crore

USL internal estimate

12%Spirits

AGENDA

USL AT A GLANCE

Advantaged route to consumer with full coverage

of all relevant liquor outlets

USL AT A GLANCE

Over 140 own

brands with 15millionaire brands

Outstandingportfolio across eachprice point

Wide manufacturing footprint with presence in every

state/territory

Largest alcobev

company in India and

2nd largest by

volume in the world

Strong distribution capability with products available in >95% of

stores

BIGGEST BRANDS IN MARKET

India’s largest consumer goods brand

No. 1 premium white spirit in India

Fast growing Indian whiskey

2nd largest Scotch in India

No. 1 Luxury Imported Scotch Whisky in India

Fastest growing scotch in India

Premium Indian whiskey

Highest priced Indian whiskey

OUTSTANDING PORTFOLIO ACROSS EACH PRICE POINTLu

xury

Pre

miu

mP

rest

ige

Po

pu

lar

AGENDA

OUR AMBITION AND STRATEGY

OUR LONG TERM PERFORMANCE AMBITION IS:

To create one of the best performing, most trusted and respected consumer products

companies in India

OUR STRATEGY TO DELIVER OUR GLOBAL AMBITION

01

02

03

04

05

Strengthen and accelerate core brands to win across each of the 3 India’s

Evolve Route to consumer to deliver balance between sell-in and demand creation

Drive out cost throughout the value chain to invest in growth and enhance margins

Transform USL and industry reputation towards ideals of corporate citizenship

Guarantee plans with right organization, people and capabilities

STRENGTHEN AND ACCELERATE CORE BRANDS

Innovate and introduce new to market brands

Renovate and rejuvenate our existing brands

Continue to invest behind our brands1

2

3

STRENGTHEN AND ACCELERATE CORE BRANDS

Renovation

Strengthen positioning and activation. Renovate our brands and drive sustained growth

Royal Challenge McDowell’s No 1. whiskey Signature

STRENGTHEN ROUTE TO CONSUMER

Affluent

Middle

Aspiring

Luxury

Premium Core

Prestige Core

Popular

Portfolio

Leverage outlet as a media to build brand

imagery

Create demand through consumer-winning activationsconsumer-winning

activations

Leverage trade as an ambassador

for our business

Key RTC objectives

Leverage scale

STRENGTHEN ROUTE TO CONSUMER

What was done differently?

• QDVP3 (Quality, Distribution, Visibility, Price, Promotion, Persuasion)

• Guidelines for each type of channel• Intense execution by sales team• Incentives linked to 3rd party audits

• Result: ~20% of India’s alcobevoutlets made into “Perfect Stores”

BEF

OR

EA

FTER

Create a “Sell Out” culture and leverage stores in a media dark market

Creating Perfect Stores

DRIVE OUT COSTS

Productivity

What was done differently?

• Productivity program launched in F15

• Nothing held holy – all P&L lines challenged

• Big wins: Glass light weighting, procurement efficiency and network optimization

Mitigate pricing shortfall and improve margins through Productivity

TRANSFORM USL AND INDUSTRY REPUTATION

Shaping the environment to do business

• Data & analysis based White Papers created on topics of interest to states to build a symbiotic relationship and create compelling “Win-Win” outcomes.

• Create broader partnership with states• Address overlapping impacts of center & state policies

• “USL-Road to Safety” - National programme in partnership with NDTV • Spanning 45 cities across 20 Indian states designed to reach 12,000 Traffic Police

officers and 8,000 Drivers

• Grass root community outreach program in districts where USL has a presence• Aimed at empowering communities through Safe access to water; Healthcare;

Employable skills training

Influencing public policy

Alcohol in Society

Project SHE

BUILDING A FUTURE READY ORGANIZATION

Create a “Fit for Purpose” organization with the right capabilities and processes in place

What was done differently

Right sizing organization by reducing layers and improving spans

Bring in new capabilities – e.g. Innovation, Compliance, Manufacturing Excellence

Creating performance culture focused on value delivery

Measuring employee engagement with targeted improvement interventions

AGENDA

FINANCIAL RESULTS

SANJEEV CHURIWALA - CFO

FULL YEAR F16 PERFORMANCE IN SUMMARY

Diageo brand portfolio added

Rs 676 Crore net sales

Prestige and Above segment net sales up

26%

EBITDA margin

9.7%, up 364bps

EBITDA Rs. 880 Crore

with 81% growth

Net sales growth

13%

Profit after tax

Rs. 981 Crore

Share gains in a number of brands

Net debt reduced by

Rs. 737 Crore to Rs.

4,250 Crore

Underlying marketing investment up

10%Diageo brand portfolio fully integrated

VOLUME DECLINE OF 1%

94.2

93.0

2.2 2.9

3.7

1.9

1.3

86

88

90

92

94

96

98

ReportedF15

Powerbrands infocusedstates

Haywards OtherPopularbrands

Prestigeand Abovesegment

Diageobrand

portfolio

ReportedF16

Popular segment Prestige & Above segment

Case, mn

NET SALES GROWTH OF 13%

8,049

9,092

92

275

676

7,000

7,500

8,000

8,500

9,000

9,500

ReportedF15

Popular segment Prestige andAbove segment

Diageo brandportfolio

ReportedF16

Rs Crore

486

880

506 (273)

93 (36)61 43

0

400

800

1,200

ReportedF15

Gross profitfrom

operations

Marketingspend

RPT benefiton Marketing

spend

Staff costs Otheroperatingexpenses

RPT benefiton Otheroperatingexpenses

ReportedF16

EBITDA AND EBITDA MARGIN

6.0% 0.9ppts (2)ppts 1.1ppts 0.5ppts 2.6ppts 0.5ppts 9.7%Rs Crore

CASH MOVEMENT - CONSOLIDATED

363

162

393

868

168 (232)

(737)

(468)

(193)

0

400

800

1,200

1,600

2,000

OpeningcashF15

Cash fromoperations

Sale of UBLshares

Bouvetdivestment

Net capexpayment

Loanrepayment

Net interestpayment

Tax paid ClosingcashF16

Rs Crore

DEBT MOVEMENT - CONSOLIDATED

4,987

4,250

(82) (654)

2,000

4,000

6,000

ReportedF15

Long termproceeds

Short termrepayment

ReportedF16

Rs Crore