Creating Multiple Drivers of Growth

through Responsible Competitiveness

Focus on FMCG Business & Sustainability

JP Morgan India Investor Summit 2020

21st September 2020

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ITC’s Non-Cigarette Business Portfolio

Foods Personal Care

Education & Stationery Safety Matches & Incense Sticks

FMCG

Hotels Paperboards, Paper & Packaging Agri Business

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Strategic directions – ITC FMCG

Invest in cutting-edge product Impactful campaigns in conventional &

development & R&D capabilities digital media

Leverage LSTC for innovation Purpose-led brands

Consumer
- first-to-market, science-driven R&D and Connect & Deepen Digital/social media consumer
differentiated products Innovation Brand engagement
Affinity

Agile &
Institutional Distributed
Synergies Supply Create structural advantage
Drive Synergistic growth for securing Chain
competitive advantage Minimise total cost of product

Enhance scale in existing categories while simultaneously seeding new categories

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Driving Synergistic Growth

Brand
Building
Capability

Life Sciences & Deep & Wide

Technology Distribution
Capability Network

High Quality
Foods Agri Sourcing
Consumer Expertise
Engagement

Packaging
Cuisine Knowhow
Knowledge

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Rapid scale up of FMCG businesses
(` cr.)

14000

12844
12505
11329
10512
12000

9731
10000

9038
8122
8000

7012

6000
5545
4482
4000
3642

2000

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20

3rd Largest FMCG Player in India

One of the fastest growing Foods Businesses in India

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Significant increase in Scale & Profitability of FMCG businesses
(` cr.)
Segment Revenue Segment EBITDA

8122 10512 12844 165 265 914

FY14 FY17 FY20 FY14 FY17 FY20

Consistent improvement in EBITDA Margin

7.6% 8.1%
6.7% 7.7%
7.0%
5.9% 5.4% 5.7%
5.0%
4.5% 4.3%
3.2% 3.2%
2.4% 2.6% 2.4%
1.9%

58 69 128 181 257 65 90 159 221 49 122 173 256 93 175 228 256

FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20 FY17 FY18 FY19 FY20

Q1 Q2 Q3 Q4

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Created over 25 world-class mother brands for Indian Consumers

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Category Leadership in a relatively short span of time

Annual Consumer Spends  19700 cr. (FY20) Market Standing

~6000 cr. # 1 in Branded

Atta # 1 in Notebooks

~4000 cr.

#1 in Cream
~2700 cr. Biscuits # 2 in Deodorants
# 3 Overall

~1400 cr.
# 1 in Bridges
segment # 2 in Bodywash
# 1 in Potato Chips
~1300 cr. (South)

~800 cr.
#1 in Dhoop
# 2 in Noodles # 2 in Agarbatti

>500 cr.

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Branded Packaged Foods – Diverse Portfolio, Strong Brands

Biscuits, Staples, Snacks, Noodles & Pasta, Confectionery, Ready to Eat, Juices,
Dairy, Chocolates and Coffee

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Personal Care
Soaps, Shower Gels, Fragrancing products, Antiseptic Liquids, Hand Wash, Sanitizers,
Disinfectants, Wet Wipes, Skin Care, Shampoos, Floor Cleaner, Fruit & Vegetable Wash

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ITC FMCG – well positioned for rapid growth
Market Size potential : Illustrative Categories (` cr.)

Snacks Spices Biscuits Branded Atta

143000 110000 111000 50000

87000
100000
70000 31000
61000
56000
39000 19000
32000 38000
22000 12000

2020 2025 2030 2035 2020 2025 2030 2035 2020 2025 2030 2035 2020 2025 2030 2035

Noodles Deodorants Handwash & Bodywash Floor Cleaner

21000 11000 9000 6000

6000 4000
13000 7000

5000
8000 3000 2000
5000 3000 1200
1100

2020 2025 2030 2035 2020 2025 2030 2035 2020 2025 2030 2035 2020 2025 2030 2035

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First-to-Market Innovations

Dark Fantasy ChocoFills

Luscious chocolate filling
enrobed within a rich
cookie
Sunfeast YiPPee!
Sunfeast Wonderz B Natural Juices Sunbean Beaten Caffe
Unique round shape and
Real fruit inclusions Aseptic PET format
non-sticky noodles

Savlon Savlon germ Nimwash Engage Flip Dual Fiama Body Wash
Surface disinfectant & Multi protection wipes Fruit and vegetable 2 fragrances @ pocket Fragrance encapsulation
purpose disinfectant spray and liquid cleaner format technology

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Premiumising the Portfolio

Aashirvaad Select and Nature’s Fiama handwash B Natural APET Juices Fabelle India’s first
Candyman Jelimals, Tadka
Super Foods range chocolates Ruby
Time & Fantastik
chocolate

Premium Perfume range Classmate Asteroid Paperkraft premium

Body Wash with fragrance Dermafique Skin care
Geo Boxes stationery
encapsulation

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Building a ‘Free From’ and ‘Good For You’ portfolio

Aashirvaad Aashirvaad
Aashirvaad Nature’s Super Foods range ITC Master Chef B Natural Sugar Release Control Multigrain Atta
Ragi Flour, Multi Millet Mix, Gluten Free Flour Super Safe Prawns immunity juices Atta

Sunfeast
YiPPee! Veda Marie Light Bingo Starters – Baked Farmland
Power Up Atta Noodles Sunfeast Farmlite Digestive & 5 natural ingredients Rich in protein & dietary fibre Low Sugar & Anti-oxidant
Protein Power
Potato

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Winning in Strategic & Emerging Channels

Modern Trade e-Commerce

Key Strategies

Deepening capability

Developing tailored products

Strategic planning with large accounts Explosive growth in e-Com –

MT Growth @ 2x of General Trade holds immense potential

On-the-Go and Institutional

Food Service Opportunity
(Airports, Railway Stations, Airlines, Corporate Parks etc.)

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Leveraging Digital to deepen consumer engagement – The 3C’s

Content Connect Commerce

Innovative &
Unique Recipes

ITCstore.in
Fostering Learning
through
Gamification &
Augmented reality
Online Entertainment & Recipes

Classmateshop.com
Devotional Content

Brand Advocacy by
employees

myClassmate Mangaldeep Forging Strategic Partnerships with Zomato,

ITC IRIS Digital Influencers
Swiggy, etc.

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Sixth Sense - Marketing Command Centre

Marketing Command Centres

operational in Kolkata & Bengaluru
Dashboards on Social Media & Brand
Performance Indicators (online / offline)

Nearly 2000 creatives generated

210 Mn+ impresssions
185 Mn+ Reach

Social Listening Tracking Reporting performance Analytics & Insights 2.9 Mn+ engagements

Moment Marketing
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Education & Stationery Products

Classmate - No. 1 Notebook brand in the country

Superior quality in-house paper + best-in-class distribution
Adjacent Stationery products – Pens, Geo Boxes etc.
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Incense sticks (Agarbattis) & Safety Matches

Mangaldeep No. 1 Dhoop brand; No. 2 overall AIM No.1 Matches Brand

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ICML – Cost advantage, Freshness, Agility and Scalability

Centres of manufacturing excellence

- safety, quality, cost, people capability
KAPURTHALA

HARIDWAR

Recipe secrecy & integrity

GUWAHATI
Protection of manufacturing know-how
ULUBERIA

PANCHLA

Fresher products RANJANGAON

KHURDA

Distance-to-market reduction MEDAK

Optimise Inventories MALUR

Logistics cost reduction MYSORE Commercialised (9 nos)

Under construction/commissioning (2 nos)
Co-hosted warehouses
TRICHY
Reduction of operational nodes

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Cutting-edge R&D capability
Life Sciences & Technology Centre, Bengaluru

350 highly
qualified Partnering with
Global R&D
scientists; over
centers and
900 patent Academia
applications

LSTC

Pilot Plants for all State of the Art

product Analytics Labs
categories

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Unique sources of competitive advantage – FMCG

• Superior Consumer Insight discovery & Established Trademarks

Key levers of profitable growth
• Deep rural linkages, agri-sourcing, culinary expertise of Hotels
• Purposeful Innovation
• Relentless focus on quality, hygiene and food safety
• Brand Portfolio
• State-of-the-art ICMLs – structural cost management & efficiency in
market servicing • Scale

• World-class R&D capability @ LSTC, Bengaluru • Supply Chain Efficiencies

• Cutting-Edge Digital capabilities • Power of Digital

• World-class & motivated talent pool – ‘proneurial’ spirit

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 Covid-19 - Response

Agility in Adversity I Compassionate in Crisis

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Responding with Speed & Agility > 40 new launches in last 5 months

Savlon Savlon Hexa Savlon

Savlon
Disinfectant Spray Hand Sanitiser, Soaps and Bodywash Multi Purpose disinfectant
50p Sanitiser pouch
spray & liquid

Savlon B Natural Vivel Aashirvaad Svasti

NimWash
Germ Protection Wipes Neem Oil + Aloe Lassi
Fruits & Vegetable Wash Immunity Range, Nagpur Orange
Vera
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Strategic Interventions : Supply chain & Distribution

Business Continuity & Alternative Channels of Agility & Innovation Managing

Rapid Bounce-Back Distribution in Execution Uncertainty & Risk

 Rapid capacity ramp up (Sanitisers  ITC Store on Wheels; Serviced  Rapid scale up of Direct-to-  Shortened demand
over 200x, Handwash by 4.5x, Savlon 800+ residential societies in Customer/Market shipments planning cycles
Soaps by 3.4x) top markets from factories
 85%+ customers resumed business
within a week of lockdown  Partnerships with Domino’s,  Direct Store deliveries for  Data analytics
Dunzo, Swiggy, Amway & Modern Trade customers
 Augmented direct distribution Zomato
 Focus on fewer SKUs
 Enhanced focus on Rural / Stockist  Online-ordering system for & Higher Value packs
 ITC e-store launched retailers
channel

 High focus on fulfilling demand in  Availability scaled up across  Telecalling & WhatsApp  Flexi Manufacturing
Top outlets, Modern Trade & new sales channels - sweet based order taking from plans / small run
ECom shops, dairy, vegetable vendors retailers sizes

 Presence scaled up in Chemist

outlets

Safety & Hygiene protocols deployed across all nodes of operations

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Strong Performance Delivery in Q1 FY21

• Comparable Revenue up 19%; EBITDA margins up 170 bps

 Atta, Noodles, Biscuits, Dairy, Handwash & Sanitizers posted strong growth – market share gains
• 9R

Staples, Convenience Foods and

Discretionary/ OOH
Heath & Hygiene Products

c. 75% (Growth of 34%) c. 25% (De-growth of 25%)

*% Portfolio Contribution
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Agri Business

Leading Agri Business player in India & Pioneer in rural transformation

Sourcing & Supply operations spread across 22 states
Largest procurer of wheat after FCI
5th largest leaf tobacco exporter in the world - 39% value share of Indian exports
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Agri SBU: Strategic Direction

Deliver sustainable competitive edge to ITC’s FMCG Businesses through agri

sourcing

Enhance scale & scope of external business leveraging deep and wide sourcing
network

Build a robust portfolio of value-added products to expand margin

Establish B2B & B2C brands

Develop a Future Ready portfolio - Organic/Food safe/attribute based products and

Medicinal & Aromatic Plants

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Strategic sourcing support to Foods Businesses

Wheat Potato Fruit Pulp Spices Milk

New Varietal Security of Supply High quality at Sourcing Food Safe Sourcing of high
Development competitive prices products quality milk through
Yield improvement farmer network,
Securing premium Develop supply chain for Develop new products
varieties Proximal to deployment of milk
Manufacturing unique offerings chillers
Least cost Logistics

Agri Business capability

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Scaling up presence in Value Added Agriculture

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ITC – Hotels and Paperboards & Packaging businesses
Paperboards & Packaging Hotels

 Clear market leader - scale, profitability &  One of the fastest growing hospitality chains in
sustainability India

 Best-in-class operating metrics  Trailblazer in Green Hoteliering

 Fully Integrated Operations  Asset right growth strategy  reduce capital

intensity
 Secure, sustainable & cost competitive fibre base
 Drive Value Creation:
 42% of energy consumption from renewable sources
- sweat existing assets, additional revenue
 Addressing the Plastic Substitution space streams, alternative structures

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 ITC’s Sustainability Initiatives

Creating Innovative, Synergistic models  Sustainable competitive

advantage & foster inclusive growth

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ITC – A Global Exemplar in Sustainability

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Top ESG ratings by Sustainalytics & MSCI

ITC Rated AA by MSCI-ESG

Highest amongst Global Tobacco cos. &
ahead of FMCG peers

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Social and Farm Forestry

Greening over 8,00,000 acres High yielding varieties Clonal Saplings grown in
Creating 147 million person days of developed by ITC R&D Nursery
employment
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Watershed Development

Nearly 19,000 structures creating rainwater harvesting

potential of 38.2 Million KL irrigating 11.3 lakh acres

(3x of ITC’s net water consumption)
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Baareh Mahine Hariyali : ITC’s Pilot project in Eastern UP
ITC e-Choupal: ITC’s
Agri Footprint in UP
Pradesh
e-Choupal district
Baareh Mahine Hariyali
district

Multiplying
Farmer
Incomes
2,00,000 30% to 75%
farmers covered. To be income rise for those who
rolled out to over 10 lakh have implemented the
farmers, progressively programme partially

30,000
farmers, who have adopted
all initiatives, reported
doubling of incomes
A 360 degree model to raise farmer incomes
Impactful Social Performance

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Global Recognition

World Business and Development Inaugural UNDP-ICC Award Sustainability Leadership Award, Zurich
Award 2012 at the Rio+20 UN Summit

The Stockholm Challenge Award Development Gateway Award

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ITC: Creating Enduring Value

A passion for
profitable growth….

…..in a way that is sustainable…….

…. and
inclusive
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Thank You

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Forward-looking Statements

This presentation contains certain forward-looking statements including those describing the Company’s
strategies, strategic direction, objectives, future prospects, estimates etc. Investors are cautioned that
“forward looking statements” are based on certain assumptions of future events over which the
Company exercises no control. Therefore there can be no guarantee as to their accuracy and readers are
advised not to place any undue reliance on these forward looking statements. The Company undertakes
no obligation to publicly update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. These statements involve a number of risks, uncertainties and
other factors that could cause actual results or positions to differ materially from those that may be
projected or implied by these forward looking statements. Such risks and uncertainties include, but are
not limited to: growth, competition, acquisitions, domestic and international economic conditions
affecting demand, supply and price conditions in the various businesses in the Company’s portfolio,
changes in Government regulations, tax regimes and other statutes, and the ability to attract and retain
high quality human resource.

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