Havells India Limited

February 2011

Introduction
Founded in 1971 with the acquisition of HAVELLS brand; HAVELLS headquartered in Noida, NCR Delhi d a s ead g b a d t e e ect ca co su e p oducts Indias leading brand in the electrical consumer products # 1 - 4 brand in all product categories with aggressive branding strategy Foothold in international market with the acquisition of Sylvania worldwide except North America*, Australia & NZ # 4 brand in the worlds lighting and fixture market Major presence in Europe and Latin America with strong brand recall in other continents
Indian Revenue

Consolidated Revenue

1.2 billion
Consolidated Revenue

54 billion

25 billion

International Revenue

438 million

In North America ie USA, Canada and Mexico Sylvania brand is owned by Siemens Osram

Our Presence
Europe Major Presence through Sylvania 31% of Consolidated Revenue (63% of Sylvania) 4 Manufacturing Units & distribution across Europe India Major Presence through Havells India 52% of Consolidated Revenue 11 Manufacturing Units Strong Distribution Channel

Emerging Economies ~ 70% Developed Economies ~ 30%

Latin America & Asia (ex India) Presence through Sylvania 17% of Consolidated Revenue (37% of Sylvania) 2 Manufacturing Units

Key Markets Dynamics

India I di Markets Average Number of Competitors Competitive positioning Revenue % Robust Growth 12% 15% 12%-15% 10-12 Latin America & Asia (ex India) Robust Growth 12% 15% 12%-15% 3-4 Europe Stability 2% 3% 2%-3% growth 3-4

Amongst top 1-4

Amongst top 1-3

Amongst top 4

52%

17 %

31 %

Operating margin

11% - 12%

12% - 14%

6% - 7%

Shareholders
Promoters hold 61.6%, single business focus. Overtime company attracted high quality long term investors Warburg Pi W b Pincus Sequoia capital CLSA DSP Bl k k Blackrock SAIF partners Sloane Robinson
Promoters 61.6%

ShareholdingPattern
Warburg Pincus 14.0% 14 0% FIIs 12.6% Indian Public 9.5% Mutual Funds 2.4%

HSBC (largest FII in India) SBI (largest bank in India)

Market price data & daily turnover in Rs million
1000
Market pr rice Bonus Bonus Bonus

4,000 3,000 2,000 1,000 0

Daily turn nover in Rs million

800 600 400 200 0

Apr05 Jan06 Nov06 Aug07 Jun08 Apr09 Feb10 Nov10 ClosingPrice TurnoverinRsmn

Agenda
Introduction Havells: Well positioned for profitable growth p p g Sylvania: Upside Potential

Large and Attractive Macro Opportunity

Construction
Across India including tier II/III cities, rural area Self construction not focused with large builders Large industrial & commercial activities

Consumer spend d
Distinctive shift towards branded goods Increasing disposable income Affordability and willingness to pay

Infrastructure
Focus area Power, a key , y initiative Large fund allocation from Govt. coupled with l ith large investment from private cos.

Shift from unorganized to organized

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Consistent outperformer
C Consistent G i t t Growth 10 years CAGR th Revenue - 37% EBIDTA - 35% Profit after Tax - 46% 36 quarters of consecutive growth* As on Dec 10 - Net debt of Rs. 1,512 mn
60% 11.8%

in millions of Rupees

Net Revenue & EBIDTA margins %

24,735 24 735
21,294

12.3%

10,036
10.4%

11.4%

1,484

01

02

03

04

05

06

07

08

09

10 9M11

High Returns on capital ** Return on capital employed Improved from 28% in FY01 to 46% in FY10 Return on equity Improved from 31% to 39%

RoACE

RoAE

50% 40% 30% 20% 10% 0% 01 02 03 04 05 06 07 08 09 10

* Growth on y-o-y basis (except Q3FY09 due to one time loss due to sharp fall in metal price) ** based on average excluding investment

Market Leader Across Product Segments

Domestic switchgears MCB

#1

Market Size ~ INR 12,000 million ($ 270 mn) Market share ~ 20% (15% in 2006)

Peers position - Legrand MDS - Schneider Electrical Consumer Durable 15% Lighiting 15%

Modular SwitchesCrabtree

#2

Market Size ~ INR 10,000 million ($ 220 mn) Market share ~ 15% (5% in 2006)

Peers position - Matsushita/ Anchor Roma

Switchgear 28%

Industrial switchgears

#4

Market Size ~ INR 20,000 million ($ 450 mn) Market share ~ 8% (7% in 2006)

Peers position - L&T - Siemens - Shnieder

Cable & Wire 41%

#2

Peers position Cable C bl Wire Wi Market Size ~ INR 120,000 million ($ 2,700 mn) - Polycab - Finolex Market share ~ 9% (6% in 2006) - KEI - Polycab

Cable & Wire

*Contribution margins are derived after deducting direct cost and direct selling variables from net sales Contribution Market size data and peers position as per best estimates of management

Market Leader Across Product Segments

Compact Fluorescent Lamps

#2

Market Size ~ INR 12,000 million ($ 270 mn) Market share ~ 10% (10% in 2006)

Peers position p - Philips - Osram

Luminaries

#4

Market Size ~ INR 20,000 million ($ 450 mn) Market share ~ 10% (3% in 2006)

Peers position P iti - Philips - Crompton - Bajaj - Wipro

Lighiting 15% Electrical Consumer Durable 15%

Cable & Wire 41%

Fans

#3

Market Size ~ INR 30,000 million ($ 670 mn) Market share ~ 13% (6% in 2006) M k t h i

Peers position - Crompton - Orient - Bajaj

Switchgear 28%

New

Electrical Water Heater

Market Size ~ INR 8,000 million ($ 200 mn)

Peers position - Bajaj - Recold

*Contribution margins are derived after deducting direct cost and direct selling variables from net sales Contribution Market size data and peers position as per best estimates of management

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Strong Distribution Network

Pan India presence through 4,300 wholesalers/ dealers network and 25,000 retailers Strong focus on dealer relationship

Revenues

North 34%

East 23%

West 15%

Direct presence in metros and major towns, increasing direct presence in tier II/ III cities and rural areas Aggressive brand building via media, distinctive packaging Havells Galaxies - One stop shop, initiative to y g reach consumer directly, increasing from 76 to 100 by March 2011
South 28%

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Financial Highlights
Operational highlights 9M FY11 21,294 2,426 2 426 11.4% 1,730 8.1% 8 1% 1,960 Net Worth Net debt Net Fixed Assets Investment (Sylvania) Net current assets Balance Sheet highlights FY08 Net Revenue EBIDTA EBIDTA % Net Profit Net Profit % Cash flow from operations CAPEX 20,556 1,992 1 992 9.7% 1,435 7.0% 7 0% 1,290 1,847 FY09 21,984 2,033 2 033 9.3% 1,452 6.6% 6 6% 2,732 1,805 FY10 24,735 3,053 3 053 12.3% 2,282 9.2% 9 2% 2,051 1,690 Low Debt, high assets turnover ratio

in millions of Rupees

FY08
6,490 (291) 3,852 1,616 1,662

FY09
9,319 (871) 4,655 3,879 1,659

FY10
11,352 475 6,012 5,317 1,451

9M FY11
13,069 1,512 1 512 6,831 7,155 1,184

EBIDTA margins stabilizing in current year with the base effect of last year FY10. p FY09 EBIDTA includes one time loss due to sharp fall in metal prices, excluding it margins would be 11.3%

Outstanding commitment in Sylvania including guarantee is Rs. 900 mn (Euro 15 mn) Low working capital due to channel financing made available to dealers ie direct funding by bankers having no recourse on the company

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Agenda
Introduction Havells: Well positioned for p p profitable g growth Sylvania: Upside Potential

 Worlds No. 4 Lighting Brand, present in both lighting source and fixtures fi 100 years of brand history, presence across five continents, 10,000 distributors Acquired in April 2007 to Capitalise on the underleveraged brand and distribution network Improve margins through better sourcing from India and China Cross sell high margin Havells switchgear range Enterprise value of 200 million paid through 120 million non-recourse debt 80 million recourse debt (already paid 70 million) Latin America & Asia 37% of revenue f Leading Brand Robust growth g Europe 63% of revenue High entry barrier Stable cash flows

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Sylvania Complete Turnaround

in millions of Euro

Recession

necessitated

restructuring

activity

in
(Unaudited)

Sylvania in 2008-2009. Successfully completed restructuring, getting partial benefit during CY10, full benefit to accrue in CY11. Growth momentum build up in Emerging markets, Latin America and Asia. Europe continued to be stable with focus on p profitability. y To launch in newer Emerging economies incl India and to cross leverage Havells products in mature markets k t EBIDTA% Exceptional cost Profit before tax Net Revenue Operating Profit (EBIDTA)

CY 08 495

CY 09 406

CY10 438

16 3.2% 8 (25)

0.4 - 52 (76)

24 5.5% - (1.6)

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in millions of Rupees f

Consolidated performance Profit & Loss

Highlights 9M FY11 Net Revenue EBIDTA As % to NR Profit before tax & after exceptional items Exceptional Item ** 21,294 2,426 2 426 11.4% 741 142 19.2% 21,185 939 4.4% Havells Standard Sylvania Consol Consol* 9M FY11 42,694 3,502 3 502 8.2% Consol FY10 54,315 3,116 3 116 5.7% Consol FY09 54,775 2,717 2 717 5.0%

2,238 --

134 --

226 66

2,585 66

(1,310) 2,938

(1,172) 1,987

EBIDTA margins to improve with increased profitability from Sylvania Exceptional items mainly consist of restructuring cost and impairment of fixed assets in Sylvania

* Consolidated figures exclude inter companies transaction ** Exceptional items have been adj with business reconstruction reserve during FY10, whereas for FY09 was included in profit and loss account

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in millions of Rupees f

Consolidated performance Balance Sheet

Highlights Hi hli ht Dec 10 Shareholders fund Loan Funds Deferred Income Tax Total funds employed 13,080 1,751 339 15,170 501 18 (31) 488 (1,245) 10,640 -9,395 Havells H ll Standard St d d Sylvania S l i Consol* C l* Dec 10 5,971 11,342 308 17,621 Consol C l FY10 4,004 10,664 266 14,934

Net Fixed Assets Investments Goodwill Net Current Assets Total assets

6,831 7,155 -1,184 15,170 15 170

260 --228 488

2,590 -3,172 3,633 9,395 9 395

9,681 -3,172 4,768 17,621 17 621

9,210 -3,212 2,512 14,934 14 934

* Consolidated financials are after eliminating intercompany transactions and incorporating financials of other non operating subsidiaries subsidiaries.

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Looking forward
Emerging E E i Economies i
Key focus area India remain key market Havells to leverage brand and distribution and to launch new products in the associated categories Sylvania launch to leverage brand recall backed by Havells strong presence Leverage Sylvania brand in other emerging economies like Latin America, ASEAN region America

Developed Economies
M Manage Sylvania i d S l i in developed market th l d k t through f h focus on cost cutting and cash flow maintenance

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Disclaimer
The information contained in this presentation is only current as of its date. All actions and statements made herein or otherwise shall be subject to the applicable laws and regulations as amended from time to time. There is no representation that all information relating to the context has been taken care off in the presentation and neither we undertake any obligation as to the regular updating of the information as a result of new information, future events or otherwise. We will accept no liability whatsoever for any loss arising directly or indirectly from the use of, reliance of any information contained in this presentation or for any omission of the information. The information shall not be distributed or used by any person or entity in any jurisdiction or countries were such distribution or use would becontrary to the applicable laws or Regulations. It is advised that prior to acting upon this presentation independent consultation / advise may be obtained and necessary due diligence, investigation etc may be done at your end. You may also contact us directly for any questions or clarifications at our end.

This presentation contain certain statements of future expectations and other forward-looking statements, including those relating to our general business plans and strategy, our future financial condition and growth prospects, and future developments in our industry and our competitive and regulatory environment. In addition to statements which are forward looking by reason of context, the words may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential or continue and similar expressions identify forward looking statements. Actual results, performances or events may differ materially from these forward-looking statements including the plans objectives expectations estimates and intentions expressed in forward looking statements due to a number of plans, objectives, expectations, factors, including without limitation future changes or developments in our business, our competitive environment, technology and application, and political, economic, legal and social conditions. It is cautioned that the foregoing list is not exhaustive This presentation is not being used in connection with any invitation of an offer or an offer of securities and should not be used as a basis for any investment decision.

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