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7/31/2019 DIL-Inv Pres Merrill Lynch India Investor Forum Sept-11
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DABURINDIALIMITED
September 2011, London
Merrill Lynch - India Investor Forum
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FMCG GROWTH STORY
I nd i a FMCG Secto r Vo lume and Va lue Gr ow th Ra te ( Y - o - Y % )
H igh Gr ow th Phase
Indias FMCG sector reported steady sales CAGR of 11.2% over FY00-10 on theback of stron annual volume rowth of ~8.5%.
Source: In dustry data, Standard Chartered Research
Growth being driven by increasing consumption led by rise in incomes,changing lifestyles and favorable demographics
As per a recent study conducted by Booz & Company, FMCG sector is expected
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between of Rs. 4,000 to Rs. 6,200 billion
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FMCG CURRENT SCENARIO
FMCG Spl i t : OTC, Food an d Non -Food FMCG industry pegged at US$30billion in CY10
Of the entire FMCG sector, Food is120,000
140,000
(11%)116,053
128,580Rs.Crores
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3
, -
Rural sector accounts for about 33%of total revenue
40,000
60,000
80,000
100,000
OTCPRODUCTS
NonFood
FoodProducts
(8%)
(14%)
(19%)(10
%)
(14%)
82,615
97,276
48
46
46
45
4
4
FMCG Sales Chann el B reakdow n
Source: AC Nielsen
0
20,000
MATSep'07 MATSep'08 MATSep'09 MATSep''10
(20%)
(22%)48 50
50
3.3%
5.0%
5.9%
(Growth%)
Of the 7.8 million retail outlets forFMCG, Grocers are the dominant
58.6%
13.2%
8.2%
5.8%
format
Modern Trade contributes to 6%of FMCG sales
Grocers GeneralStores Chemists
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3
Source : AC Nielsen
ModernTrade
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PENETRATION LEVELS: SUFFICIENT HEADROOM
77%80%
80%
90%
Rural Penetration Urban Penetration
67%
57%59%
50%
60%
70%
37%
18% 18%
32%
19%
26%
20%
30%
40%
3% 2%4%5%
0%
10%
Toothpaste Shampoo Hair Oil Skin
Cream
Mosquito
Repellants
Instant
Noodles
Hair Dyes Floor
Cleaners
Source: Industry Data
Low penetration levels offer room for growth across consumption categories
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PER CAPITA CONSUMPTION: ROOM FOR GROWTH
9 3
Sk in Care Per Cap i ta Consum pt io n ( in US$) Sham poo Per Cap i t a Consump t ion ( i n US$)
in US$in US$
I n d i a h a s l o w p e r c ap i t a co n s u m p t i o n a s co m p a r e d t o o t h e r e m e r g i n g e c on o m i es
3.2
7.4 7.7
3
4
5
6
7
8
1.0 1.1
.2.4
1
1.5
2
2.5
0.80.3
0
1
2
China Indonesia India Malaysia Thailand
0.3
0
0.5
China Indonesia India Malaysia Thailand
2.9
2.5
3
3.5
Too thpas te Per Cap i t a Consump t ion ( i n US$)
in US$
0.5
1.0
0.4
.
0
0.5
1
1.5
2
5
5
China Indonesia India Malaysia Thailand
Source: MOSL
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INFLATION PLAYING SPOILSPORT
WPI has hovered in the 9% to 10%range this Calendar Year inspite ofprevious years high base
-
9.5% 9.5% 9.7% 9.7% 9.1% 9.4%
Month l y W PI Trend ( CY 2011)
inputs have witnessed sharp
increase, exerting pressure on grossmargins
ers s en y g n a on may s arimpacting demand for FMCG
Jan Feb Mar Apr May Jun
Dom est ic Coconut O il Pr ice (Jan-1 0 t o Jun e-11 ) Nym ex Crude ( A pr -10 t i l l June-11)
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DABUR OVERVIEW
Established in 1884 - more than 125 Yearsof Trust & Excellence
Among top 4 FMCG companies in India
Eleven B i l l i on Rupee Brands
Worlds largest in Ayurveda and natural
healthcare Revenue of Rs. 41.1 billion and profits of
Rs. 5.7 billion in FY2010-11
Strong brand equity
Dabur is a household brand
Vatika and Real are Superbrands
a mo a , ea a ur ran e amongIndias Most Admired Brands
11 Brands with sales of over Rs. 1 billioneach
Wide distribution network covering 2.8million retailers across the country
17 world class manufacturing plantscatering to needs of diverse markets
Dabur ranked200 in theFortune India500 list
Dabur movesup to take the78th spot in theSuper-100
Dabur rankedamong MostTrusted Brands inIndia, according to
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Strong overseas presence with around30% contribution to consolidated sales
list, released byBusiness India
Brand TrustReport, IndiaStudy, 2011
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FINANCIAL PERFORMANCE
34,15841,099
40000
45000
Sales
in Rs. m i l l ion
12,004 12,849 12,356 14,170 17,56520,803
23,963,
0
5000
10000
15000
20000
25000
30000
FY02 FY03 FY04^ FY05 FY06* FY07 FY08 FY09 FY10** FY11^^
in %
EBI TDA Mar g in ( in % ) Net Pr o f i tin Rs . m i l l ion
3,9135,032
5,686
5000
600015.3%
17.1%18.1% 18.5% 18.3%
19.8% 19.9%
16.0%
18.0%
20.0%
22.0%
1,065 1,5582,142
, ,
0
1000
2000
3000
4000
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
.
10.0%
12.0%
14.0%
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
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^ Sales show a decline in FY04 on account of de- merger of Pharm a business
* Balsara acquisition added 10% to topline in FY06* * Fem acquisition added 3.5% to topline in FY10^ ^ Hobi and Namaste acquisitions added 4% to t opline in FY11
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GLOBAL FOOTPRINT
Canada
UK
Turkey
U.S. Egypt
UAENepal
N ige r i a
BDesh
Dom est ic Mfg .Locat ions
Manufacturing Facilities
Key markets
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Our s t r a tegy i s t o l oca l ize m anu fac tu r i ng , supp l y cha inand p r oduc t o f f e r i ngs t o su i t consumer r equ i r em en ts
i n each g eogr aphy
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ROBUST DISTRIBUTION NETWORK
Factory
St ock ist Su p er St ock ist I n s t i t u t i o n s
t r a d e
W h o lesa ler s Su b St ock ist
RETAI L TRADE
CONSUMERS
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10
Di rect + I nd i rec t Reach c ov e r i ng c .3 m i l l ion Reta i l Ou t l e t s
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PRESENCE IN FMCG CATEGORIES
Marke t Sha rePosi t ion Key Br an d sCategory
Hai r Care 12%3Dabur Amla hair Oil, Vatika hair oil &
Oral Car e
13%3Red toothpaste, Babool, Meswak, Redtoothpowder
Ay urv ed i cTonics
7%3 Dabur Gulabari, Fem, Dabur Uveda
67%1 Dabur Chyawanprash
Sk in Care
Diges t i ves 56%1 Hajmola
Real Fruit Juices Real Activ
Honey 1 50% Dabur Honey
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Hair care includes Hair Oils & Shampoos; Oral care includes Toothpastes & Toothpowder; Skin care includesmoisturizers, face cleaning, lightening, anti ageing & other skin care products; Digestives includes herbal digestives
Glucose 2 25% Dabur Glucose
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BUSINESS STRUCTURE
a u r op er a es r ou g r ee ocu se r a eg c u s n ess n s
FMCGportfoliocomprisingfour
distinctbusinesses:
PersonalCare
D iv is ion ConsumerHealthCare
HomeCare
Foods68%
I n t e r n a t i o n a lBus iness D iv is ion
Cateringtohealthandpersonal
careneedsofcustomersacross
differentinternational
markets
s annin MiddleEastand
Africa,SouthAsia,EUandU.S.
Consum er Hea l thDiv is ion
productsthat
deliver
the
age
old
benefitsofAyurveda inmodern
readytouseformats
8%
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12Note: Percentage share in revenue based on FY11 Financials ; Hobi and Namaste included in International Business Division
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TRANSITION TO THE NEW INTEGRATED STRUCTURE
N ew s t r uc t u re t o p rov i de enhanc ed c apab i l it y and s ca l e t o ou r cons um er hea l t h bu s iness
68%Hair
Care
OralCare
HairCare
Old St r uct u r e New St r uct u r e
Consumer
CareDivision
HealthSupplements
Digestives
HPC
OralCare
HomeCare
SkinCare
HomeCareDabur
SkinCare
HealthSupplements
8%Dabur Foods
ConsumerHealth
OTC
HealthCare
Digestives
OTC
Foods
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Division Ethicals
International
Business
Division
EthicalsInternational
Business
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HPC CATEGORIES
Market ShareKey B rands
Dabur Amla:Largest brand in
the portfolio
Vatika: Value addedcoconut oil
Anmol Hair Oil:Value propositionValue Share-ACN MAT Mar 2011
Market ShareKey B rand s
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Vatika range of shampoosValue Share-ACN MAT Dec-2010
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HPC CATEGORIES
Market ShareKey B rands
Value Share -ACN MAT Mar, 2011
Dabur Red: Toothpaste& Toothpowder
Babool: Targeted ateconomy segment
Meswak: Premiumtherapeutictoothpaste
Market Share* Key B rand s
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15
*Company estimates;
Includes Fem skin care portfolio
Gulabari range of rosebased skin careproducts:
Moisturizer, Facefreshener & Rose water
Fem Gold Bleach:Launched recently
Uveda: Range ofAyurvedic SkinCare
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HPC CATEGORIES
Market ShareKey B rands
Hom e Care
Value Share-ACN MAT March, 2011 for
Mosquito Repellants Cream category
Odonil: Air freshnerrange: Largest brandin the portfolio
Odomos: Mosquitorepellant skin cream
Sanifresh:
Toilet cleaner
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HEALTH CARE CATEGORIES
Ch y a w a n p r a s h M ar k e t Sh a r e Key B rands
ea t u p p em en t s
Volume Share-ACN MAT - Mar, 2011
Dabur Chyawanprash:Largest selling healthsupplement in the
country
Dabur Glucose:2nd largest
player in thecountry
Dabur Honey: Largestbranded honey in thecountry; growing
category through replacesu ar strate
Market Share Key B rands
Diges t i ves
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17Value Share-ACN MAT Mar, 2011 for Herbal Digestives
Hajmola: Flagship brand
for branded Digestives
Hajmola tasty
digestive candy
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HEALTH CARE CATEGORIES
an t ca s
OTC com pr ises:
Generics
ETHI CAL com pr ises:
Tonic OTC Healthcare is Rs.130 billion size
OTC Heal t hcar e Focu s
Branded Products Classicals
Branded Ethicals
industry
Expected to grow at 14-15% p.a. aspreference for Over-the-Counter productsaccelerates
Consolidating / expanding currentportfolio
Launching new products inemerging therapeutic areas
Honitus: Day & Nightfor Cold and Flu relief
Pudin Hara LemonFizz for digestion
Look at inorganic opportunities
Acq u ir ed t he en er gizer b ran d, Th ir t yPlu s f r om Aj an t a Ph ar m a in May 2 0 1 1
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Promoting Dabur Ayurveda: Generating
equity for Ethical portfolio
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FOODS
Foods portfolio comprises Juices and Culinary range
Juices are under the brands Real, Activ and Burrst
Foods
Cu inary range is un er Homma e ran
Market ShareKey B rands
Company Est. Mar, 2010 for Fruit Juice category Real: Flagshipbeverages brand
Real Activ: Rangeof 100% pure juice
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INTERNATIONAL BUSINESS DIVISION
Starte as anExporter
Focus on Orderfulfillment throughIndia Mfg.
Set up a ranc isee atDubai in 1989
Demand generationled to setting up ofmfg in Dubai & Egypt
Rename ranc isee as Da urInternational Ltd
Local operations further strengthened
Set up new mfg facilities in Nigeria,RAK& Bangladesh
Bui ing sca e-22% ooverall Dabur Sales (FY11)
High Levels of Localization
Global Supply chain
1 9 8 0 s Ear ly 9 0 s 2 0 0 3 On w ar ds Tod ay
Hig h l ig h t s Hig h Gr ow t h in I BD
4,770
6,025
8,922
5000
6000
7000
8000
9000
10000
a ur s overseas us ness con r u esto consolidated sales led by CAGR of 32% inlast 6 years
Focus markets:
GCC
in Rs . m i l l ion
1,2811,807
2,2582,917
,
0
1000
2000
3000
4000
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Egypt
Nigeria
Turkey
Bangladesh
U.S. High level of localization of manufacturing
and sales and marketing
Leveraging the Natural preference among
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N ew p r o d u ct s c o n t r i b u t i n gs ign i f i cant ly to o verseas sa les
oca consumers o ncrease s are n personacare categories
Sustained investments in brand building andmarketing
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OUR STRATEGY
Three p ronged Grow th St r a tegy
Expand I n n ov at e Acq u i r e
Our d i f f e ren t i a t i on i s t he h e rba l and ayu rved ic p lat f o r m
Expand
Strengthening presence in existing categories and markets as well entering new geographies
Maintain dominant share in categories where we are category builders like HealthSupplements, Honey etc. and expand market shares in other categories
Calibrated international ex ansion local manufacturin and su l chain to enhance flexibilit/ reduce response time to change in market demands
I n n o v a t e
Strong focus on innovation. Have rolled out new variants & products which have contributed toaround 5-6% of our rowth .a.
Renovation of existing products to respond to changing demands (Toothpowder to Toothpaste)
Acqu i re
Acquisitions critical for building scale in existing categories & markets
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Should be synergistic and make a good strategic fit
Target opportunities in our focus markets
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ACQUISITION OF HOBI GROUP, TURKEY
Acquisition of Hobi Group, Turkey for a totalconsideration of US$ 69 Million completed onOctober 7, 2010
Hobi manufactures and markets hair, skin andbody care products under the brands Hobby
and New Era Product range of the company is
complementary to our product range
Acquisition provides an entry into anotherattractive emerging market and a goodplatform to leverage this across the region
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ACQUISITION OF NAMASTE LABORATORIES LLC.
Dabur India Limited through its subsidiary Dabur International Limited acquired 100% stakein Namaste Laboratories LLC for $100 million, in an all-cash deal on January 1, 2011
Namast is a leading ethnic hair care products company, having products for women ofcolour, with revenues of $95 million from US, Europe, Middle East and African markets
The company markets a portfolio of hair care products under the brand Organic Root
Stimulator and has a strong presence in ethnic hair care market for women of colour. Acquisition to enable entry into Ethnic Hair Care products market valued at more than US$1.5
billion and tap into significant market opportunity in the fast growing, hugely populated (~1n ye g y un erpene ra e consumer mar e s o u a aran r ca
At an acquisition price of $100 million, the deal value is at 1.1x Sales and 8.3x EBITDA
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RECENT FINANCIAL PERFORMANCE
1,9392000
2500
9 244
12,16212000
14000
Sales: Q1 FY12 v / s Q1 FY11
in Rs . m i l l ion
EBI TDA: Q1 FY12 v / s Q1 FY11
in Rs . m i l l ion
,
0
500
1000
1500
0
2000
4000
6000
8000
10000
Q1 FY11 Q1 FY12Q1 FY11 Q1 FY12
1,217
1150
1200
1250
PAT: Q1 FY12 v / s Q1 FY11
in Rs . m i l l ion
Sales for Q1 FY12 increased by31.6%, largely driven by acquisitionsand volumes
EBITDA increased b 27.8% des ite1,068
95 0
1000
1050
1100
input cost inflation PAT grew by 19.6%
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STOCK PERFORMANCE AND SHAREHOLDING PATTERN
FIIs 17.4 Indian
Shareho ld ing St ru c tu re*Market Cap i ta l i za t ion in Rs. b i l l i on
190
FIs/
MFs/Ins.
Cos., 7.1%
,
%
Public andOthers, 6.7
%
17
romo ers,
68.7%
2001 2011
*As on May 6, 2011
D ab u r r a n k ed a s t h e o r a n iz at i o n t h at o f f er s t h e b es t r et u r n t o i n v e st o r s b
the 6 th Soc ia l & Cor po r a t e Gover nance Aw ar ds , p r esen ted b y t he Bom bayStock Exchan ge
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CONSOLIDATED P&L
InRs.million Q1FY12 Q1FY11 YoY(%)
GrossSales 12,162 9,244 31.6%
Less:Excise Duty 117 79
NetSales 12,046 9,165 31.4%
.
MaterialCost 6,290 4,346 44.7%
%ofSales 51.7% 47.0%EmployeeCosts 951 728 30.6%%ofSales 7.8% 7.9%
, , .
%ofSales 12.5% 16.3%OtherExpenses 1,583 1,217 30.1%
%ofSales 13.0% 13.2%Other
Non
Operating
Income 151 73 108.7%
EBITDA 1,939 1,517 27.8%
%ofSales 15.9% 16.4%InterestExp.andFin.Charges 126 36 253.8%
Depreciation 154 135 14.2%
Amortization 57 10 472.7%
ProfitBeforeTax(PBT) 1,602 1,337 19.8%
TaxExpenses 323 263 22.7%
PAT(Beforeexceptionalitem) 1,279 1,074 19.1%
%ofSales 10.5% 11.6%PAT(AfterexceptionalItems) 1,279 1,074 19.1%
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MinorityInterest (Profit)/Loss 0.2 0.6
PAT(AfterExtraordinaryitem&MinorityInt) 1,277 1,068 19.6%
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CONSOLIDATED BALANCE SHEET
I n Rs. m i l l ion As on Ju n 1 1 As on Ju n 1 0
Sources Of Fund s
Shareho lders ' Fund :
Share Capital 1,741 869
Reserves & Surplus 13,534 10,195
15,275 11,064
Minority Interest 43 44
Loan Funds:
Secured Loans 4,762 1,387Unsecured Loans 5,349 10,111 830 2,217
Deferred Tax Liabilit 221 150
TOTAL 2 5 ,6 5 0 1 3 ,4 8 0
App l i ca t i on o f f unds :
F ixed Assets:
Gross Block 19,520 10,158, ,
Net block 15,011 6,665
Capital WIP 654 246
I n v e s t m e n t s 3,105 2,100
Curr ent Assets , Loans & Advan ces
Inventories 7,522 5,139
, ,
Cash & Bank balances 3,619 3,104Loans & Advances 5,464 20 , 147 4,532 14 , 344
Less: Cur r en t L iab i l i t i es and Prov is ions:
Current Liabilities 6,543 5,583
Provisions 7,655 4,979
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, ,
Net Cu r r en t Asset s 5 ,9 4 9 3 ,7 8 2
Miscellaneous Expenditure 931 682
Deferred Tax Assets
TOTAL 2 5 ,6 5 0 1 3 ,4 8 0
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Investor Relations
Dabur India Ltd
Contact:+91-11-42786000
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