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October 2002
Godrej Consumer Products LimitedGodrej Consumer Products Limited
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1
Agenda
Background
Product Profile
Performance
Shareholder Value
Initiatives
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Background
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The Company
GCPL is a result of the demerger of the Consumer Products Division ofGodrej Soaps Limited(now renamed Godrej Industries Ltd.)
Focused FMCG company
Presence in Personal, Hair, Fabric & Household care market categories
Market Leadership in HairColour & Liquid Detergents
High Standards ofCorporate Governance
Owns all its Brands
63.0%26.8%
8.2%
1.9%
GCPL - category-wise Revenue and Growth
Figures in parentheses refer to revenue growth rates (net of excise) over corresponding period of previous year
Soaps
Liq.Detergents
Toiletries
Hair Care 58.1%
25.1%
9.0%
7.8%
FY2002
Soaps
Liq.Detergents
Toiletries
Hair Care
H1FY2003
(10%)
(10%)
(-6%)
(17%)
(54%)
(14%)
(14%)
(-10%)
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Godrej Consumer - A new focus
Godrej Soaps Limited
Consumer business was part of the
conglomerate, with core profitability of the
consumer segment not being unlocked
Godrej Industries focus on AOS and Fatty
Alcohol along with investments in Godrej
Sara Lee and Godrej Agrovet was not
appreciated by the market
Consequently, GCPL was de-merged
from Godrej Soaps Limited (renamed as
Godrej Industries Limited). GCPLs focus
is the FMCG sector with emphasis on
personal & household care
Godrej Consumer
GCPL emerges as one of the fastest
growing FMCG companies with aCAGR of
20% forpast 3 years
Four categories: soaps, hair colours,
toiletries and detergents
Focus on employee empowerment and
performance linked incentives has led to this
phenomenal growth
Asset efficiency ratios rank among the
highest amongst peers with ROCE for
FY2002 at 90%
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Godrej Consumer Products Ltd: A new management
Board of Directors Qualifications
Adi Godrej - Chairman & Managing Director M.S. (MIT)
JamshydGodrej B.S. (Illinois Institute of Technology)
NadirGodrej B.S. (MIT), M.S.(Stanford),
M.B.A. (Harvard)
BalaBalachandran Distinguished Professor at Kellogg
RamaBijapurkar Faculty at IIMA, Marketing Strategist
Bharat Doshi FCA, FCS, LLM, PMD (Harvard)
Anupam Puri Ex-partner, McKinsey
Hoshedar Press -Exec.Director & President B.Tech (IIT), PGDBM (IIM)
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Current Shareholding Pattern & Shareholder
Information
FII , N I &
OCB
8.1%
Indi idual& Other
Bodie
Cor orate
17.4%Promoter
rou
9.4%
Ban ,
In uran e
Co , MF
and FI
5.1%
GCPL shares are traded on The
Stock Exchange, Mumbai (BSE),
National Stock Exchange (NSE) &
stock exchanges at Chennai,
Kolkata, Delhi and Ahmedabad.
Listed on BSE on 18-June-01 Listed on NSE on 20-June-01
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Facilities & etwork
Manufacturing Facilities - 3
Branches - 4
C & F Agents - 32
Distributors - 2000
Retail Outlets covered - Above 500,000
Retail Coverage ofany Godrej Soap - 1.6 mn
Retail Coverage ofany Godrej Hair Dye - 1.2 mn
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Product Profile
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Key Brands
F
abric & HouseholdF
abric & HouseholdCareCare
Hair CareHair CarePersonal CarePersonal Care
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Performance
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GCPL Performance Highlights
GCPL outperformed its peers in the FMCG sector
Market Growth GCPL GrowthQ2 FY 3 FY 2 Q2 FY 3 FY 2
Toilet Soaps -3.1% -6% 16% 10%
HairColour -1.5% 10% 18% 1 %
Liquid Detergents 22.4% -11% 51% 10%
Tota a e ( et o e e) ( )
0
200
00
00
00
000
200
00
Q
FY0
Q2
FY0
Q3
FY0
Q
FY0
Q
FY02
Q2
FY02
Q3
FY02
Q
FY02
Q
FY03
Q2
FY03
YoY
a e
Growth ( ) -
GCPL
FMCG du
tr
-
0!
-" !
0!
" !
0!
" !
20 !
2" !
30!
Q
FY02 Q2 FY02 Q3FY02 Q
FY02 Q
FY03 Q2 FY03
GCPL#
$du
%
tr&
Source: ORG MARG retail sales audit for FMCG industry
Q2 FY03 figures for Industry is for July & August 02
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Toilet Soaps
Sales et o e ise s
3
Y Y
3
Y Y Y Y
3
Y Y Y 3 Y 3
Contributed 63% to own branded sales in
H1 FY03 (58% in FY02)
Soap industry faced an extremely
challenging environment in FY02. The top
10 brands contracted and overall sales for
the industry was down by 6%
Godrej No. 1continues to outperform
and gain market share in the sub-popular
category (now available in 3 variants: Rose,
Sandal & Natural)
Godrej Fairglowconsolidated position in
the fairness soap category
Increased focus in the Cintholrange to
improve presence in the premium segment
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Hair Colour
Sales (net of excise) (Rs mn)
0
50
100
150
200
250
300
Q1
FY01
Q2
FY01
Q3
FY01
Q4
FY01
Q1
FY02
Q2
FY02
Q3
FY02
Q4
FY02
Q1
FY03
Q2
FY03
Contributed 2 % to own branded sales in
H1 FY03 (25% in FY02)
Leader in this category with a 44.5%
market share in H1 FY03 (44.6% in FY02)
Presence across all price points: powder,
oil, liquid and high end fashion colours
Low penetration suggests high growth
potential
Production at Guwahati to optimize fiscal
benefits
Launched new variants in the Godrej
Colour Softrange and also GodrejNupurin sachets
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Liquid Detergents
es net e ise s n
'
(
)
0 1
(
' 2
)
0 1
(
' 3
)
0 1
(
' 4
)
0 1
(
'
(
)
0 1 2
' 2
)
0 1 2
' 3
)
0 1 2
' 4
)
0 1 2
'
(
)
0 1 3
' 2
)
0 1 3
Contributed 8% to own branded sales
in FY02
Ezee is the market leader with a share
of 83.3% in H1 FY03 (82% in FY02)
Demand is seasonal in nature with
application on woolens and soft clothing
Plans to introduce aproduct targeted at
other washing applications to reduce
seasonality
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Toiletries
les et o e ise s
5 6
7 8
9
6
5
@
7 8
9
6
5 A
7 8
9
6
5 B
7 8
9
6
5 6
7 8
9 @
5
@
7 8
9 @
5 A
7 8
9 @
5 B
7 8
9 @
5 6
7 8
9
A
5
@
7 8
9
A
Contributed 8% to own branded sales in H1
FY03 (9% in FY02)
Presence in shaving cream, fairness cream,
talcum powderand deodorant
High growth category providing exciting
opportunities
Gaining market share in shaving creams
Production at Guwahati to optimize fiscal
benefits
New products in deodorants and other
categories to drive growth
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Market Shares
Source : ORG Data
All figures shown are % for All India Value Market Share
2000-0 200 -02 Apr-Sep02
Toilet Soaps 5.6% 5.8% 5.8%
HairColour 42.1% 44.6% 44.5%
Liquid Detergents 5.9% 81.9% 83.3%
Fairness Cream 2.1% 3.4% 2.5%
Shaving Cream 10.3% 10.5% 12.1%
Talcum Powder 1. % 1.3% 1. %
Deodorant - - 1.5%
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GCPLs Performance Highlights
Growth drivers for future earnings
Low incremental capex
Growth in revenues expected to exploit economies of scale in purchases and manufacturing,
further enhancing operational efficiencies
Ouradvertising and promotional spending to branded sales is at the higher end of the FMCG
sectoras we invest aggressively in the business. A&P to Sales is lower in FY03 because of
efficiencies in buying media time, use of channels for rural market & efficient execution of
advertising.
(Rsmn) H
Advertisement & Sales Promotion 668 287
Total A & P to own brand sales (net of excise) % 17% 14%
(Rsmn) FY2002 H1FY03
Depreciation (Rs mn) 94 45
Depreciation to net revenues % 2% 2%
Net Block 935 906
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H FY03 Performance
PowerBrands: Cinthol, Godrej FairGlow, Godrej No.1, Godrej HairColour, Ezee.
PowerBrands sales grew by 1 %
Toilet Soaps
Godrej Brand Soaps sales grew by 14% (against degrowth of the category) from Rs.1158mn
in H1 FY02 to Rs.1314mn in H1 FY03, led by Godrej No1 which grew by 96%
Relaunched Godrej FairGlow
Launched special trade and consumer initiatives to mark the completion of 50 years of the
Cinthol Brand
Hair Colour
HairColour sales grew 14% from Rs.489mn in H1 FY02 to Rs.560mn in H1FY03
Launched Mehendi Power in sachets under the brand nameG
odrej Nupur Launched CopperBrown, Dark Mahogany & Burgundy fashion shades ofGodrej Coloursoft.
No.1 in volume in fashion colours
Godrej HairCare Institute (GHCI) salon activity intensified
PHD sachet distribution continues to grow with special focus on rural distribution crosses
1.2 million outlets
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Summary Financials
smn F F
sal s *
Operati profit 755 425
Depreciation 94 45
Interest & Financial charges (net) 45 14
PBT 632 371
PAT 420 268
Networth 531 601
Debt 225 344
Net Fixed Assets 935 906
Net Current Assets (285) (63)
Cash & cash equi alents 132 132
Operating Profit Margin (%) 16 18
Net Profit Margin (%) 9 12
RoCE (%) 90 79
RoNW (%) 79 89
Di idend payout ratio (%) 80 87
* Sales are net of excise duty
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HighFree CashFlow Generation
GCPL generates significant free cash flows, which are returned to shareholders as dividends
FY 2002 Div Div per share
1st Interim Dividend 50.0% 2.00
2nd Interim Dividend 8 .5% 3.50
(on face value ofRs.4 Share)
FY 2003
1st Interim Dividend 50.0% 2.00
2nd Interim Dividend 50.0% 2.00
Strong EVAgrowth
Lower capital expenditure coupled with negative working capital enabled a high EVA of
Rs301mn for FY02 (Rs.202mn for H1 FY03). EVA to capital employed at 40% for FY02 (41% in
HI FY03)
We remain committed to deliver shareholder value
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HighFree CashFlow Generation
GCPL has completed the shares uy ack
Shares bought back
Num er of share capital Amt utilised Avg price Period
1,456,593 2.5 Rs.92.6mn Rs.64 Jan-Jun 2002
411,962 0. Rs.46.0mn Rs.111 Jul-Sep 2002
Third shares uy ack
Approved by the Board of Directors on October 22, 2002
Maximum outlay - Rs.100 mn
Buyback from open market (BSE & NSE) at market price
Maximum price ofRs.1 5 per share of face value ofRs.4/-
Buyback for both Demat as well as physical shares
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Share Price Performance
50
70
90
110130
150
170
190
210
Jun-0
1
Jul-01
Au
g-0
1
Se
p-0
1
O
ct-01
No
v-0
1
De
c-0
1
Jan-0
2
Feb-0
2
M
ar-02
Apr-02
Ma
y-0
2
Jun-0
2
Jul-02
Au
g-0
2
Se
p-0
2
O
ct-02
BSE 200 Index BSE Sens ex Godrej Cons umer
The stock outperformed the road and narrow indices
S o u r c e : Pr o we s s
0
20
40
60
80
100
120
140
Ju
n-
01
J
ul-01
Aug
-01
Sep-
01
Oc
t-01
Nov-
01
Dec-
01
Ja
n-
02
Fe
b-
02
Ma
r-
02
Ap
r-
02
May-
02
Ju
n-
02
J
ul-02
Aug
-02
Sep-
02
Oc
t-02
0
500000
1000000
1500000
2000000
2500000Godrej Consumer Volume (RHS)
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Initiatives
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Initiatives
Divisionalisation of business carried out with the formation of Soapand Personal Care teams
effective 1st Oct 02 with mfg, procurement and marketing under one roof
Focus on Personal, Hair & Fabric care categories
Consumer centricity to guide all business actions
Restructuring of Distribution System - Super & Sub Stockists appointed
SKU Rationalisation Implementing distributor-level inventory management systems for its key dealers
Leverage group synergies such as combined purchases of raw materials and media
Exploit tax benefits in backward areas; new factory in Guwahati to enhance profitability
Return excess cash to the shareholders through dividend and shares buyback
EVA Implementation complete across the organisation.
Measurement & Remuneration based on EVA. Introduction of Individual Performance Factor
(IPF) in year 2
Red & Blue Team Project - Think Tank - Young Executive Board constituted
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Thank You