Dabur India Limited

C P fil Corporate Profile

January 2014 Ja ua y 0
Agenda
Dabur India-Introduction
FMCG Industry Scenario
Business Overview
FMCG Industry Scenario
Strategy Overview
Recent Performance
2
Introduction
Establishedin1884 morethan128
YearsofTrust&Excellence
WorldslargestinAyurveda and
naturalhealthcare
l f b ll d f f
Dabur rankedamongstthe
Top5Indiancompanieswith
thebestBoardofDirectors
Dabur IndiaLtdBagsGolden
PeacockAwardForExcellence
InCorporateGovernance2012
SalesofRs.61.5billionandprofitsof
Rs.7.6billioninFY201213
20 ld l f t i f iliti
p
InFMCGSector
20worldclassmanufacturingfacilities
cateringtoneedsofdiversemarkets
Strong overseas presence with 31% Strongoverseaspresencewith31%
contributiontoconsolidatedsales
Dabur bagsPeople'sChoice
CorporateGreenStarAward
for2012foritsenvironment
focussed initiatives
Dabur rankedamongstIndia's
MostAdmiredCompaniesby
ForbesIndia
14 5 8 14billionRupeebrands 5.8mn retailoutletreachinIndia
3
Vision and Core Values
Dedicatedtothehealthandwellbeingofeveryhousehold
Vision
Ownership
Passion
for
Winning
Integrity
Core
Values Values
People
Developm
ent
Innovation
Consumer Team
k Focus Work
4
Key Milestones
1884 1972 1986
Dr. SK Burman started
an Ayurvedic Pharmacy
in Kolkatta
The company shifted
base to Delhi from
Kolkata
Registered as Public
Limited Company
1994
Li t d th B b
1998
P f i li d ith
2003
Ph ti l B i Listed on the Bombay
Stock Exchange
Professionalized with
Burman Family handing
over day to
management
Pharmaceutical Business
de-merged to focus on
core FMCG business
2004
International Business
2005
Acquired Balsara
2006
Dabur Figured in Top 10 International Business
set up in Dubai to tap
overseas opportunity
Acquired Balsara
strengthening Oral care
& gaining entry into
Home care
Dabur Figured in Top 10
Great Places To Work
2008
Acquired Fem Care
Ph t i
2010
Overseas acquisitions -
Hobi Group Turkey and
2013
Crossed Rs. 60 bn mark
in annual sales and
Pharma entering
mainstream Skin care
Hobi Group, Turkey and
Namaste Labs, US
in annual sales and
Market Cap of US$5
billion
5
Performance Overview
Sales
28.1
33.9
40.8
52.8
61.5
Robustprofitablegrowthtranslating
intosuperiorshareholderreturns
Sales
inINRbn
FY09 FY10 FY11 FY12 FY13
Market Capitalization
11 2
14.0
16.0
EBITDA
MarketCapitalization
137 8
167.2
185.4
238.9
inINRbn
inINRbn
5.2
6.7
8.3
9.5
11.2
2.0
4.0
6.0
8.0
10.0
12.0
85.4
137.8
0.0
FY09 FY10 FY11 FY12 FY13
11 0
ProfitafterTax
FY09 FY10 FY11 FY12 FY13
3.9
5.0
5.7
6.4
7.6
3 0
5.0
7.0
9.0
11.0
inINRbn
1.0
1.0
3.0
FY09 FY10 FY11 FY12 FY13
6
Business Footprint
UK UK
Turkey
U
.
S
.
E
g
y
p
t
U
A
E
N
e
p
a
l
N
i
g
e
r
i
a
B

D
e
s
h
N i g e r i a
S r
i L a n k
a
D o m e s t i c M
f g . L o c a ti o n s
M a n u f a c t u r i n g F a c i l i t i e s
K e y m a r k e t s
O u r s t r a t e g y i s t o l o c a l i z e m a n u f a c t u r i n g , s u p p l y c h a i n a n d p r o d u c t o f fe r i n g s t o s u i t c o n s u m e r r e q u i r e m e n t s i n e a c h g e o g r a p h y 7
Our Billion Rupee Brands
Home&
PersonalCare
HealthCare
Foods
8
Research & Development Focus
Strong New Product Development
Ayurvedic Medicines
Team of scientists including
Ayurvedic doctors, Pharmacists,
Agronomists, Botanists, Tissue
Culture specialists, etc.
Personal Care
Foods
Home Care
A Bi t h I iti ti
Culture specialists, etc.
OTC Healthcare
Agro Biotech Initiatives
Protecting endangered herbs
Technical assistance to farmers
Contract cultivation of herbs
Nearly25newproductsand
d d
Contract cultivation of herbs
Green House at Nepal
AgronomyInitiatives:GreenhouseatDabur
Nepal & Uttaranchal
DaburResearchFacilities
variantsintroducedinFY2013
Nepal&Uttaranchal
9
Dabur - Domestic Distribution Structure
Depot Depot
Factory Factory
(Carry&ForwardAgents)
Depot Depot
( y g )
InstiStockists InstiStockists Stockists Stockists Superstockists Superstockists
Wholesalers Wholesalers
ModernTrade
Stockist
ModernTrade
Stockist
Sub stockists Sub stockists
Insticustomers Insticustomers
Wholesalers Wholesalers
Retailtrade Retailtrade
Substockists Substockists
Ruraltrade Ruraltrade
Shoppers&Consumers Shoppers&Consumers
Directreach0.8mn outlets
Totalreachat5.8mn retailoutlets,oneofthehighestamongFMCGcompanies
10
Agenda
Dabur India-Introduction
FMCG Industry Scenario
Business Overview
FMCG Industry Scenario
Strategy Overview
Recent Performance
11
FMCG Sector in India
Th I di FMCG i i d R 2 illi i h l I di ib i TheIndianFMCGsectorssizeispeggedatRs.2trillionwithruralIndiacontributingto
athirdofrevenues
AsperastudyconductedbyBooz&Company,FMCGsectorisexpectedtogrowinthe
f d ld h k b rangeof12%to17%upto 2020andcouldtouchamarketsizebetweenRs.4,000toRs.
6,200billionby2020
KeyGrowthDrivers:
Low Shift to
Lowpercapita
consumption
Favourable
demographics
Low
penetration
levelsof
consumer
Shiftto
branded
productsfrom
unbranded
Growth
potentialin
ruralmarkets
products products
12
Category Penetration Levels - India
91%
Urban Rural
84%
69%
91%
72%
56%
63%
21%
13%
45%
22%
12%
4%
13%
10%
2%
12%
Glucose BrandedBaby HairOil Shampoo Toothpowder Toothpaste ToiletCleaners
Source:IRS(IndianReadershipSurvey) 2012
Oil
Low penetration levels offer room for growth across consumption categories
Rural penetration still lower but catching up with urban penetration levels
13
Per Capita Consumption
7.4
7.7
7
8
9
2.7
2.4
2.5
3
SkinCare PerCapitaConsumption(inUS$) Shampoo PerCapitaConsumption(inUS$)
3.2
0.8
0.3 1
2
3
4
5
6
1.0
1.1
0.3
0.5
1
1.5
2
0
China Indonesia India Malaysia Thailand
0
China Indonesia India Malaysia Thailand
2.9
2 0
2.5
3
3.5
Toothpaste PerCapitaConsumption(inUS$)
0.5
1.0
0.4
2.0
0
0.5
1
1.5
2
0
China Indonesia India Malaysia Thailand
Source: MOSL
India has very low per capita consumption levels as compared to other emerging economies
14
Agenda
Dabur India-Introduction
FMCG Industry Scenario
Business Overview
FMCG Industry Scenario
Strategy Overview
Recent Performance
15
Business Structure
Dabur IndiaLtd.
Domestic(69%)
International
(31%)
Consumer
Care (55%)
Foods
(11%)
Retail
(1%)
Others
(3%)
Organic
International
(19%)
Namaste
Labs (8%)
Hobi
Group
(3%)
Care(55%) (11%) (1%) (3%)
(19%)
Labs(8%)
(3%)
Note: % figure in brackets indicate % share in Consolidated Sales for FY13
*OthersincludesCommodityExportsetc
Note:%figureinbracketsindicate%shareinConsolidatedSalesforFY13
16
Dabur Sales by Business Vertical
Dabur derives 69% of its sales from Domestic business (Consumer Care + Foods + Others)
Foods
11%
Others
4%
Dabur derives69%ofitssalesfromDomesticbusiness(ConsumerCare+Foods+Others)
and31%fromInternationalbusiness
11%
Consumer
Care
55%
Internation
alBusiness
31%
Health
Supplements
SkinCare
6%
Africa
Others
4%
Supplements
21% OralCare
17%
21%
U.S.
22%
Digestives
7%
OTC &
HomeCare
7%
Asia
17%
OTC&
Ethicals
12%
HairCare
30%
MiddleEast
36%
17
Note:AbovechartsbasedonsalesforFY13
Consumer Care Categories
Category KeyProductsandBrands MarketPosition g y y
Chyawanprash: Honey: Glucose:
#1inAyurvedic Tonics
(Chyawanprash)
Health
Supplements
( y p )
#1inbrandedHoney
#2inGlucose
HerbalDigestives:
#1inHerbalDigestives
Digestives
Baby Care: Cough & Cold: Womens Health
OTC&
Ethicals
BabyCare: Cough&Cold: Women sHealth
#1inAyurvedic OTC
18
Ethicals
Consumer Care Categories (Contd.)
Category KeyProductsandBrands MarketPosition g y y
Hair Care
HairOils: Shampoo:
#2inHairOils
#4inShampoos
HairCare
T th t T th d Toothpastes: Toothpowder:
#3inToothpastes
#2inToothpowders
OralCare
AirFreshener:MosquitoRep.Cream: ToiletCleaner: #1inAirFresheners
HomeCare
#1inMosquito
RepellantCreams
#2 i T il t Cl #2inToiletCleaners
#1inSkinLightening
(Bl h )
SkinBleaches RoseWater Creams&Lotions
SkinCare
(Bleaches)
19
Foods
Foods portfolio comprises Fruit Juices and Culinary range
Fruit Juices are under the brands Real, Activ and Burrst
Culinary range is under Hommade brand
KeyProductsandBrands MarketPosition
Juices & Nectars: Juices&Nectars:
#1inFruitJuices
Culinary:
20
International Business
i l S l kd ( 3) InternationalSalesBreakdown(FY13) Overview
Daburs international business contributes 31% to
consolidated sales
O f k t Af i Middl E t d A i
MiddleEast
36%
U.S.
22%
Others
4%
Our focus markets are Africa, Middle East and Asia as
these offer substantial long term growth opportunities
Our international business foray had been entirely
organic since 1980s, until FY201011 when we acquired
Africa
21%
Asia
17%
g q
Hobi Group and Namaste Labs
We strive towards high levels of localized supply chains
Over the years, we have made sustained investments in
b d b ildi d k ti brand building and marketing
Daburs internationaljourney:
Started as an Exporter
Focus on Order fulfillment
through India Mfg.
Renamed franchisee as Dabur International Ltd
Local operations further strengthened
Set up new mfg facilities in Nigeria, RAK &
Bangladesh
1980s Early 90s 2003 Onwards Today
g
Set up a franchisee at Dubai in 1989
Demand generation led to setting up of
mfg in Dubai & Egypt
Building scale- c. 31% of Consol. Sales
High Levels of Localization
21
International Business (Contd.)
AfricasBulgingBase AfricaOpportunity g g pp y
With a population of c. a billion, Africa offers huge
potential for the consumer sector in the long run driven by
factors such as rapidly emerging middle class, with
increasing disposable incomes
Between 2005 and 2015, it is estimated that in Africa, the
share of individuals earning above US$1,000 will grow
from 39% to 55%. from 39% to 55%.
The rapidly emerging African middle class could number as
many as 300 million, out of a total population of one billion
The acquisition of U.S. based Namaste Labs, which
Source: McKinsey on Africa, June 2010
specializes in African Hair Care was a step towards
enhancing our presence in Africa and exploiting these
growth opportunities
Namastes Product Suite Namaste sProductSuite,
undertheORS(earlier
OrganicRootStimulator)
brand
22
Recent Launches - India
Ratnaprash:Premium
HealthSupplement
FemFairnessNaturals
NoaddedAmmonia
Vatika OliveHairOil
Honitus:Honey&Tulsi
variant
Odonil 1TouchAirFreshener
Vatika Mandara &Kunkudukai
Sh i h Oli C di i i
23
variant
launchedinSouthIndia
ShampoowithOliveConditioning
launchedinSouthIndia
Recent Launches - International
FemGoldHairRemovalCream
Dermoviva FaceWash
24
Dermoviva Hand Wash
Agenda
Dabur India-Introduction
FMCG Industry Scenario
Business Overview
FMCG Industry Scenario
Strategy Overview
Recent Performance
25
Growth Strategy
ThreePillarsofGrowth
Expand
Strengtheningpresencein
existingcategoriesand
Innovate
Strongfocusoninnovation.
Haverolledoutnewvariants
Acquire
Acquisitionscriticalfor
buildingscaleinexisting g g
marketsaswellenteringnew
geographies
Maintaindominantsharein
categorieswhereweare
andproductswhichhave
contributedtoourgrowth
Renovationofexisting
productstorespondto
g g
categoriesandmarkets
Shouldbesynergisticand
makeagoodstrategicfit
Target opportunities in our
categorybuilderslikeHealth
Supplements,Digestivesetc.
andexpandmarketsharesin
othercategories

changingdemands
(ToothpowdertoToothpaste)
Targetopportunitiesinour
focusmarkets
Internationalexpansion
localmanufacturingand
supplychaintoenhance
flexibility/reduceresponse
timetochangeinmarket
ProductofferingsprimarilybasedontheAyurvedic/Natural/Herbalplatform
g
demands
26
Agenda
Dabur India-Introduction
FMCG Industry Scenario
Business Overview
FMCG Industry Scenario
Strategy Overview
Recent Performance
27
Recent Performance
4,615.3
5,304.2
3000.0
4000.0
5000.0
6000.0
Consolidatedsalesgrewby14.9%
driven by volume growth of 10% and
Revenue
0.0
1000.0
2000.0
9MFY13 9MFY14
drivenbyvolumegrowthof10%and
calibratedpriceincreases
Revenue
(inRs.Cr.)
808.2
954.1
800 0
1,000.0
1,200.0
EBITDA margin expanded to 18% v/s
17.5% in 9MFY13 supported by lower
0.0
200.0
400.0
600.0
800.0
EBITDA
(inRs.Cr.)
material costs
562 9
678.6
700 0
800.0
9MFY13 9MFY14
Consolidated PAT reported growth of
562.9
200.0
300.0
400.0
500.0
600.0
700.0
PAT*
(inRs.Cr.)
20.6% and PAT Margins improved to
12.8% from 12.2% in 9MFY13
28
0.0
100.0
9MFY13 9MFY14
*Afterminorityinterest
Market Cap and Shareholding Pattern
300
Shareholding Structure* Market Capitalization
inRs.billion
Others,
85
300
FIIs,20%
7%
85
FY09 Feb 14
Promoters
,69%
DIIs,4%
FY09 Feb14
*As of Dec 31, 2013
Daburhaswitnessedsignificantincreaseinmarketcapitalizationovertheyears
29
Consolidated P&L
DIL(Consolidated)P&LinRs.million Q3FY14 Q3FY13 YoY(%) 9MFY14 9MFY13 YoY(%)
NetSales 19,043 16,307 16.8% 53,042 46,153 14.9%
OtherOperatingIncome 50 53 158 172
MaterialCost 9,275 7,952 16.6% 25,420 22,793 11.5%
%ofSales 48.7% 48.8% 47.9% 49.4%
EmployeeCosts 1,580 1,301 21.5% 4,548 3,706 22.7%
%ofSales 8.3% 8.0% 8.6% 8.0%
AdPro 2,896 2,350 23.2% 7,713 6,451 19.6%
%ofSales 15.2% 14.4% 14.5% 14.0%
OtherExpenses 2,366 2,137 10.7% 6,909 6,062 14.0%
%ofSales 12.4% 13.1% 13.0% 13.1%
OtherNonOperatingIncome 339 274 23.8% 931 769 21.1%
EBITDA 3,315 2,894 14.5% 9,541 8,082 18.0%
%ofSales 17.4% 17.7% 18.0% 17.5%
InterestExp.andFin.Charges 72 78 7.6% 405 439 7.9%
Depreciation&Amortization 255 234 9.2% 711 640 11.2%
ProfitBeforeTax(PBT) 2,988 2,582 15.7% 8,425 7,003 20.3%
ExceptionalItem 47
TaxExpenses 546 478 14.3% 1,609 1,319 21.9%
PAT(Beforeextraordinaryitem) 2,442 2,105 16.0% 6,816 5,637 20.9%
%ofSales 12.8% 12.9% 12.9% 12.2%
ExtraordinaryItem 6 7 1
PAT(AfterextraordinaryItems) 2,436 2,105 15.7% 6,810 5,638 20.8%
MinorityInterest (Profit)/Loss 7 6 23 9
30
PAT(AfterExtraordinaryitem&MinorityInt) 2,429 2,111 15.0% 6,786 5,629 20.6%
%ofSales 12.8% 12.9% 12.8% 12.2%
Consolidated Statement of Assets and Liabilities
Particulars As at 31/12/2013 As at 31/03/2013
EQUITY AND LIABILITIES EQUITY AND LIABILITIES
1 Shareholders funds
(a) Share capital 1,744 1,743
(b) Reserves and surplus 23,909 19,501
Sub-total - Shareholders' funds 25,653 21,244
2. Minority interest 162 121 y
3. Non-current liabilities
(a) Long-term borrowings 4,360 5,399
(b) Deferred tax liabilities (net) 429 362
(c) Other long-term liabilities 0 1
(d) Long-term provisions 459 488
Sub-total - Non-current liabilities 5,249 6,251
4. Current liabilities
(a) Short-term borrowings 4,146 6,114
(b) Trade payables 10,761 7,453
(c )Other current liabilities 3,603 4,325
(d) Short-term provisions 748 1,869
Sub-total - Current liabilities 19,258 19,762
TOTAL - EQUITY AND LIABILITIES 50,322 47,377
B ASSETS
1. Non-current assets
( ) i d (a) Fixed assets 11,378 10,531
(b) Goodwill on consolidation 6,214 6,214
(c) Non-current investments 2,826 2,332
(d) Long-term loans and advances 269 158
(e) Other non-current assets 526 2,177
S b t t l N t t 21 214 21 411 Sub-total - Non-current assets 21,214 21,411
2 Current assets
(a) Current investments 8,213 6,504
(b) Inventories 9,081 8,444
(c) Trade receivables 6,421 4,841
(d) Cash and cash equivalents 2 121 3 568
31
(d) Cash and cash equivalents 2,121 3,568
(e) Short-term loans and advances 2,261 2,015
(f) Other current assets 1,010 593
Sub-total - Current assets 29,108 25,966
Total Assets 50,322 47,377
Disclaimer
Some of the statements made in this presentation contain forward looking information that
involve a number of risks and uncertainties. Such statements are based on a number of
assumptions, estimates, projections or plans that are inherently subject to significant risks, as
well as uncertainties and contingencies that are subject to change Actual results can differ well as uncertainties and contingencies that are subject to change. Actual results can differ
materially from those anticipated in the Companys forwardlooking statements as a result of a
variety of factors, including those set forth from time to time in the Companys press releases and
reports and those set forth from time to time in the Companys analyst calls and discussions. We
do not assume any obligation to update the forwardlooking statements contained in this do not assume any obligation to update the forward looking statements contained in this
presentation.
No part of this presentation shall form the basis of or may be relied upon in connection with any
contract or commitment This presentation is being presented solely for your information and is contract or commitment. This presentation is being presented solely for your information and is
subject to change without notice.
32