DABUR INDIA LIMITED

“DEDICATED
DEDICATED TO THE HEALTH & WELL BEING
OF EVERY HOUSEHOLD”
Investor Presentation
 DABUR OVERVIEW

9 Established in 1884 : 125 Years of Trust &

Excellence Ten Billion Rupee Brands

9 Among top 4 FMCG companies in India

9 World’s
W ld’ llargestt iin Ayurveda
A d and
d natural
t l
healthcare
9 Revenue of Rs. 34 billion and profits of Rs. 5
billion in FY2009-10
9 Strong brand equity
™ Dabur is a household brand
™ Vatika and Real are Superbrands
™ Hajmola , Real & Dabur ranked among India
India’s
s
Most Admired Brands

9 10 Brands with sales of over Rs. 1 billion each

9 Wide distribution network covering 2.8 million
retailers across the country
9 17 world class manufacturing plants catering
to needs of diverse markets
9 Strongg overseas p
presence with 18%
contribution to consolidated sales
 ECONOMY OVERVIEW

India Real GDP Y-o-Y Growth (%) India Per Capita Income (USD)

3231
0.12
9.4% 9.7% 9.2%
0.1 8.5%
7.5%
0.08 6.7% 7.2%
5.8%
0.06
4.4% 3.8%
0.04
1017
0.02

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10
FY2009 2020

Source : RBI & CSO estimates for FY10 Source : World Bank, Edelweiss Research

9 The Indian economy has been on a strong growth trajectory with real GDP growing
at a CAGR of 7.5% over the last decade
9 High rate of Gross Capital Formation of 35% and Gross Domestic Savings of 32.5%
i 2009 expected
in t d to
t drive
d i GDP growth
th off around
d 8-9%
8 9% going
i forward.
f d
9 Per capita income in India is slated to treble in the next 10 years
 FMCG INDUSTRY IN INDIA

FMCG Industry Size (India)

9 FMCG industry size at US$25
in Rs. billion
billion in CY09

9 Y-o-Y growth of 13.4%

Source : AC Nielsen
FMCG Growth : Urban & Rural

25%
20%
20%
16%
18% 9 Rural economy with government
15%
13% 18%
11%
stimulus and rising non farm
10%
10%
9%
12%
14% incomes has outpaced Urban
5% 3% growth
1%
-1%
0%

CY03 CY04 CY05 CY06 CY07 CY08 CY09

-5% -8%

-10% Urban Rural

 INDIA CONSUMPTION STORY

Aggregate Consumption across Income Brackets

in trillion, Indian Rupees, 2000
4x 70

34 Middle
Class

17
10
7

Middle Class
Source : Mckinsey Global Institute Analysis

By 2025, India is poised to become the world's fifth largest consuming country
from current position of twelfth

Note:
Annual Income (in Indian Rupees, 2000): Globals >1,000,000; Strivers =500,000-1,000,000;
Seekers=200,000-499,999; Aspirers=90,000-199,999; Deprived=<90,000
 FMCG INDUSTRY DRIVERS

9 Increasing consumption and 9 Demographic factors:

penetration levels driving growth
™ Rising income levels
™ Expanding middle class
™ Young population

India – Transforming from a pyramid to a diamond

2003 2013
181 mn households RICH CLASSES
231 mn households
High Disposables
Increasing prosperity
3 AFFLUENT 11

ASPIRING CLASSES
Growing Consumerism
46 ASPIRERS 124 Credit Culture

STRIVING CLASSES
131 STRIVERS 96
B.O.P Opportunity
Source : NCAER
 PER CAPITA CONSUMPTION: ROOM FOR GROWTH

India has low per capita consumption as compared to other emerging economies

Skin Care – Per Capita Consumption (in US$) Shampoo – Per Capita Consumption (in US$)
in US$ in US$
9 3 27
2.7
7.4 77
7.7
8
2.5
2.4
7

6 2

5
1.5
4 3.2 1.0 1.1
3 1

2
0.8 0.5 0.3
1 0.3
0 0

China Indonesia India Malaysia Thailand China Indonesia India Malaysia Thailand

Toothpaste – Per Capita Consumption (in US$)

in
3.5
US$
2.9
3

2.5
20
2.0
2

1.5
1.0
1
0.5 0.4
0.5

China Indonesia India Malaysia Thailand

Source: MOSL
 Penetration Levels: Sufficient Headroom

90% 80%
80%
77%
70%
67%
57% 59%
60%
50% 42%
37%
40% 32%
30%
18% 18%
20%
10%
0%

Toothpaste Shampoo Hair Oil Skin Cream Mosquito

Repellants
Rural Penetration Urban Penetration

Source: Industry
y Data,, IIFL

9 Low penetration levels offer room for growth across consumption categories
9 Rural penetration catching up with urban penetration levels
 KEY PLAYERS: FMCG

USD Million

Company Key Categories Sales Profit Market Cap

Soaps, Detergents, Personal Care,

Hindustan Unilever Ltd 4,479 538 12,011
Foods

Nestle India Ltd* Food, Beverages, Infant nutrition 1,101 141 6,126

Personal,
P l Health
H lth & Homecare,
H
Dabur India Ltd 733 108 3,659
Foods

Britannia Industries Ltd* Biscuits 734 33 969

Colgate Palmolive (I) Ltd

Ltd* Oral Care & Toiletries 364 62 2 462
2,462

Marico Ltd. Hair care, Food, Skincare 571 49 1,639

Glaxo Smithkline
Consumer Health Care 412 50 1,615
Consumer*

Godrej Consumer Hair Care, Soaps 438 72 2,423

Procter & Gamble^ Feminine Hygiene, personal care 166 39 1,533

Source: Published results for year ending 31.03.10

Note: Market Cap. as of 29.07.10
*Year ending 31.12.09
^Year ending 30.06.09
 DABUR:EVOLUTION

1884 2010
Dabur Ayurvedic
Dabur-
medicines Personal
Ayurveda Care
company

Dabur- Diversified
FMCG company
OTC
Home Health
ealt
Care Care

Foods

Dedicated to the health & well being

of every household
 A DECADE OF STRONG FINANCIAL PERFORMANCE

Dabur has undergone a significant transformation over the last 10 years

FY01 FY10

Sales Rs 11 billion
Rs. > 3x
3 increase
i R 34 billi
Rs. billion

EBITDA >730 bps

12.5% 19.8%
margins increase

PAT Rs. 0.8 billion > 6.4x increase Rs. 5.0 billion

Working
70 days > 5.8x decrease 12 days*
Capital

RoE 22.0% > 1.7x increase 40%

PAT 15%
7% > 2x increase
Margin
Note: Working Capital excludes Cash and Bank Balances
*Excludes provision for dividend
 FINANCIAL PERFORMANCE

Sales
in Rs. million

40000
34,167
35000
28 341
28,341
30000
23,963
25000 20,803
17,565
20000
12,004 12,849 12,356 14,170
15000 10,997
10000
5000
0

FY01 FY02 FY03 FY04^ FY05 FY06* FY07 FY08 FY09 FY10**

EBITDA Margin (in %) Net Profit

in % in Rs. million
22.0%
19.6% 6000
20.0% 18.1% 18.5% 18.3% 5,032
17.1% 5000
18.0% 3,913
15.3% 4000 3,329
16 0%
16.0% 2 817
2,817
13.3% 3000
2,142
14.0% 1,558
2000
1,065
12.0%
1000
10.0% 0

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY04 FY05 FY06 FY07 FY08 FY09 FY10

^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
 FINANCIAL PERFORMANCE – FY2009-10

Sales: FY10 v/s FY09 EBITDA Margin: FY10 v/s FY09

in Rs. million

40000 34,167 20.00% 19.6%

28,341 19.50%
30000
19.00%
20000 18.50% 18.3%
10000 18.00%
0 17 50%
17.50%

FY09 FY10 FY09 FY10

PAT*:: FY10 v/s FY09

PAT 9 Sales ggrowth led p
primarily
y by
y continued double
digit volume growth
in Rs. million
9 Fem Care Pharma which was acquired in 2008-
09 and merged with DIL w.e.f. April 1, 2009
6000 5,032 added about 3.5% in FY10 to topline.
3,912
3,9 9 EBITDA margin expanded by 130 bps during
4000
FY10 led by lower input costs.
2000
9 PAT increased by 28.6% during FY10 due to
0 strong topline, improving gross margins and
FY09 FY10 operating leverage despite higher ad spend &
tax provisioning

* PAT refers to Net Profit after Minority Interest

 FINANCIAL PERFORMANCE - Q1 FY 2010-11

Sales: Q1FY11 v/s Q1FY10

1200 ¾ Sales for Q1FY11 increased by 19.5%

1000 924
774 ¾ Volume growth constitutes 90% of the
800
600
400
increase in topline
200
0

Q1FY10 Q1FY11

PAT: Q1FY11 v/s Q1FY10

¾ PAT increased by 19.4% during
Q1FY11 despite higher ad spends &
110 106.8
89 5
89.5
90 increased taxation.
70

50

Q1FY10 Q1FY11
 PRODUCT PORTFOLIO

Health
Care

Personal
Care

Home
Care

Foods
 PRESENCE IN FMCG CATEGORIES

Category Position Market Share Key Brands

Dabur Amla hair Oil

Oil, Vatika hair oil &
Hair Care
C 3 12% Vatika Shampoos

Red toothpaste, Babool, Meswak, Red

Oral Care 3 13% toothpowder

Skin Care 3 7% Dabur Gulabari, Fem, Dabur Uveda

Ayurvedic
1 63% Dabur Chyawanprash
Tonics

Digestives 1 55% Hajmola

Fruit Juices 1 52% Real Fruit Juices, Real Activ

Honey 1 50% Dabur Honey

Glucose 2 24% Dabur Glucose

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

Revenue
Business Unit Description
Share

FMCG portfolio comprising four

distinct businesses:
Consumer Care • Personal Care
71%
Division • Health Care
• Home Care
• Foods

Range of ethical and OTC products

Consumer Health that deliver the age
age-old
old benefits of
8%
Division Ayurveda in modern ready-to-use
formats

Caters to the health & personal care

needs of customers across different
International international markets spanning
Middle East, North & West Africa, 18%
Business South Asia, EU and US through its
brands Dabur and Vatika
Note: Percentage share in revenue based on FY10 Financials ; Femcare included in Consumer Care Division
 CONSUMER CARE DIVISION OVERVIEW

FPD HCPD Balsara Foods FEM

2003-2004 2006-2007 2007-2008 2008-2009 CCD

FPD: Family Products Division

HCPD: Health Care Products Division
Balsara and Fem were acquisitions
Foods division was a 100% subsidiary of DIL

Category-wise Share of CCD Sales CCD Sales - Historical

in Rs. million
Home Foods
Hair Care
Skin Care 14.2%
31.4%
Care 5.2%
2.4%
Digestives
8.6%

Health
Suppleme
nts Oral Care
19.9% 18.2%

Note: Percentage share in revenue for FY10

 CONSUMER CARE CATEGORIES

Hair Oil
Key Brands
Market Share
7%
37% 16%

3%

6%

31%
Bajaj Dabur Dey's Medical
Emami Marico Others
Dabur Amla: Vatika: Value added Anmol Hair Oil:
Value Share-ACN June, 09 Largest brand in coconut oil Value proposition
the portfolio

Shampoo
Key Brands
Market Share

13.5% 11.2% 6.0%

23.8%
45.5%

Cavinkare Dabur HUL

P&G Others

Vatika range of shampoos Dabur Total Protect

Value Share-ACN Mar, 10 Ayurvedic Shampoo
 CONSUMER CARE CATEGORIES

Oral Care
Market Share
Key Brands

14.3%

13.2%

49.7%

22.8%

Colgate HUL Dabur Others

Dabur Red: Toothpaste Babool: Targeted at Meswak: Premium
& Toothpowder economy segment therapeutic
Value Share-ACN March, 2010 toothpaste

Health Supplements
Key Brands
d
Chyawanprash – Market Share

5.6% 11.1% 12.7%

7.9%

62.7%

Baidyanath
a dya a Dabur
abu Emami
a Zandu
a du Otherss
O Dabur Honey: Largest
Dabur Chyawanprash: Dabur Glucose: branded honey in the
Value Share-ACN March, 2010 Largest selling health 2nd largest country; growing
supplement in the player in the category through replace
country country sugar strategy
 CONSUMER CARE CATEGORIES

Foods
Key Brands
Market Share

3.7%
15.5%
45%

36 4%
36.4%

Dabur Pepsi Priya Gold Others

Real: Flagship Real Activ: Range Real Burrst: New
Value Share-ACN May, 09 ; Fruit Juice category beverages brand of 100% pure juice fruit Drink brand

Skin Care
Market Share* Key Brands
18.0%
58.9%
3.2%

6.4%

6.6%
6.8%

Hindustan
Hi d t LLever Emamii
E Dabur
D b
Loreal Cavin Care Others Gulabari range of rose based skin care Fem Skin care :
products: Moisturizer, Face freshener Acquired recently
*Company estimates; Includes Fem skin care portfolio
& Rose water
 CONSUMER CARE CATEGORIES

Digestives
Market Share Key Brands

37%
55%

8%

Hajmola:
H j l Fl
Flagship
hi bbrand
d Hajmola
H j l ttasty
t
Hajmola Satmola Others
for branded Digestives digestive candy
Value Share-ACN March, 2010

Home Care
Air Fresheners – Market Share Key Brands

20%
26%

5% 20%

30%

Odonil Air wick Premium Ambipur Others

Odonil: Air freshner Odomos: Mosquito Sanifresh:
Value Share-ACN March, 2010 for Aerosols category range: Largest brand repellant skin cream Toilet cleaner
in the portfolio
 CONSUMER HEALTH DIVISION

Description CHD Structure

9 CHD: Repository of Dabur’s Ayurvedic

Healthcare knowledge
9 Plans underway to build a comprehensive OTC (64%) ETHICAL (36%)
strategy for
f a greater pushh in OTC
O C Health
lh 9 Generics 9 Tonic
space
9 Branded Products 9 Classicals
9 Range of over 260 products
9 Branded Ethicals
9 Focusing on multiple therapeutic areas.
9 Distribution coverage of 200 000
200,000
chemists, ~12,000 vaidyas & 12,000
Ayurvedic pharmacies

Healthcare Focus

9 OTC Healthcare is Rs.130 billion size

industry
9 Expected to grow at 14-15% p.a. as Herbal Cough & Cold
preference for Over-the-Counter products Syrup Mint based medicine for digestion
accelerates
9 Dabur to expand its presence by :
9 Consolidating / expanding current
portfolio
9 Launching g new products
p in
emerging therapeutic areas
9 Look at inorganic opportunities
Promoting Dabur Ayurveda: Generating
equity for Ethical portfolio
 INTERNATIONAL BUSINESS DIVISION
ƒ Started as an ƒ Set up a franchisee at ƒ Renamed franchisee as Dabur ƒ Building scale
scale-18%
18% of
Exporter Dubai in 1989 International Ltd overall Dabur Sales
ƒ Focus on Order ƒ Demand generation ƒ Local operations further strengthened ƒ High Levels of Localization
fulfillment through led to setting up of ƒ Set up new mfg facilities in Nigeria,RAK ƒ Global Supply chain
India Mfg. mfg in Dubai & Egypt & Bangladesh

1980’s Early 90’s 2003 Onwards Today

Highlights High Growth in IBD

ƒ Dabur s overseas business contributes 18%
Dabur’s in Rs. million

to consolidated sales led by CAGR of 29% in

last 6 years
ƒ Focus markets:
ƒ GCC
ƒ Egypt
ƒ Nigeria
ƒ Bangladesh
ƒ Nepal
ƒ U.S.
ƒ High level of localization of manufacturing
and sales and marketing
ƒ Leveraging the “Natural” preference among
local consumers to increase share in personal
g
care categories
New products
N d t contributing
t ib ti
ƒ Sustained investments in brand building and significantly to overseas sales
marketing and new product launches
INTERNATIONAL BUSINESS - PRODUCT PORTFOLIO

Existing Products NPDs and Relaunches

Vatika Hamam Zaith
Hair Oils Vatika Shampoos
– Hair Fall Control

Vatika Conditioners Dabur Herbal Toothpaste

Hair Creams

Hair Treatments
Vatika Hair Oil Vatika DermoViva Soaps
 OUR STRATEGY

Three pronged Growth Strategy

Acquire Expand Innovate

Our differentiation is the herbal and ayurvedic platform

Acquire
9 Acquisitions critical for building scale in existing categories & markets
9 Should be synergistic and make a good strategic fit
9 Target opportunities in our focus markets
Expand
9 Strengthening presence in existing categories and markets as well entering new geographies
9 Maintain dominant share in categories where we are category builders like Health Supplements, Honey
etc.
9 Calibrated international expansion – local manufacturing and supply chain to enhance flexibility / reduce
response time to change in market demands
Innovate
9 Strong focus on innovation. Have rolled out new variants & products which have contributed to around
5-6% of our growth p.a.
9 Renovation of existing products to respond to changing demands (Toothpowder to Toothpaste)
 ACQUISITION OF HOBI GROUP, TURKEY

9 Agreement to acquire Hobi Group

9 This would be Dabur’s first overseas
acquisition
9 Hobi manufactures and markets hair,
hair skin and
body care products under the brands Hobby
and New Era
9 Product range of the company is
complementary to our product range
9 Acquisition provides an entry into another
attractive emerging market and a good
platform to leverage this across the region
 WORKING AT DABUR

™ A unique mix of Tradition and Modernity.

™ A quest to constantly innovate and expand the boundaries.

™ Entrepreneurial Zeal

™ A bias for action

™ Freedom to use and deploy your talent for the benefit of the organization

™ Challenging assignments

™ Continuous mentoring and guidance

 Business
Internship
p Program
g @ Dabur
 BUSINESS INTERNSHIP @ DABUR

• Identification of projects based on following criteria:

– Strong Business Linkage

– “Live” Problem/ issue based

– Functional Knowledge based

• Standardized project brief outlining deliverables handed over on joining

• Standardized Induction program

• Robust Evaluation Process : PPO / PPI

• Stipend Offered: Rs
Rs. 35
35,000
000 per month
 KEY PROJECTS – APR – MAY 2010

• Evaluating Trade promotion effectiveness in the Wholesale Channel

• Strategy
St t for
f Vatika
V tik Hair
H i Oil Micro
Mi Marketing
M k ti in
i MMaharashtra
h ht

• Strategy to increase Market Share in Fruit Based Beverage Category in

Modern Trade

• Test Launch of Hajmola 'Natkhat" - Extension of Hajmola in sugar coated,

multicolored golis targeted at Kids & Young Adults

y p
• Dabur Chyawanprash: Understanding
g the effectiveness of marketing
g mix last

year and designing way forward for next year

Questions?