Dabur India Lt Ltd d November, 2010
1 1
Index
Dabur In dia-I dia-I ntroduction FMCG Industry Scenario
Growth Strategy Recent Performance
2 2
Index
Dabur In dia-I dia-I ntroduction FMCG Industry Scenario
Growth Strategy Recent Performance
2 2
Dabur India: Key Highlights
Established in 1884 : 125 Years of Trust & Excellence
Among top 4 FMCG companies in India or ’ s arges healthcare
n
yurve a an
Ten Billion Rupee Brands
na ura
Revenue of Rs. 33.9 billion and profits of Rs. 5 billion in FY2009-10 F Y2009-10
Strong brand equity
Dabur is a household brand
Vatika and Real are Superbrands , India’s Most Admired Brands
10 Brands with sales of over Rs. 1 billion each e s r u on ne wor co c over ng million retailers across the country
17 world class manufacturing plants catering to needs of diverse markets
Strong overseas presence with 18% contribution to consolidated sales
.
3 3
Strong Financials Sa e s in Rs. m illion 40000
34,167
35000
25000 20000 15000
10,997
12,004
12,849
12,356
14,170
FY01
FY02
FY03
FY04^
FY05
17,565
20,803
23,963
28,341
10000 5000 0
FY06*
FY07
EB I T D A M a r g i n ( i n % )
FY09
FY10**
N et P rofit
i n %
in Rs. m illion
22.0% 20.0%
17.1%
18.0%
18.1% 18.5% 18.3%
19.6%
15.3%
. 14.0%
FY08
13.3%
6000
5,032
5000
4000
,
3000
2000
12.0%
1,065
1,558
3,329
3,913
2,142
1000
10.0%
0
FY04 Y04 FY05 FY05 FY06 Y06 FY07 Y07 FY08 Y08 FY09 Y09 FY10 Y10
^Sales show a decline in FY04 on account of de-merger of Pharma business *Balsara acquisition added 10% to topline in i n FY06 ** Fem acquisition added 3.5% to topline in FY10
4 4
Key Milestones 1884
1972
1986
1994
•Dr. SK Burman started an Ayurvedic Pharmacy in Kolkatta
•The company shifted base to Delhi from Kolkata
•Registered as Public Limited Company
•Listed on the Bombay Stock Exchange
2004
2005
•International Business v s on se up n Dubai to focus on overseas opportunities
•Acquired Balsara s reng en ng ra care & gaining entry into Home care
1998
2003
•Professionalization process w urman Family handing over day to management
•Pharmaceutical us ness e-merge focus on core FMCG business
2006
2007
2008
2010
•Dabur Figured in Top 10 Great Places To Work
•Dabur ranked among 'Asia's Best Under A Billion' enterprises by Forbes
•Acquired Fem Care Pharma entering the mainstream Skin care segment
•Touched US$4 billion market cap
o
2010 • Overseas acquisition, Hobi Group, Turkey to strengthen presence in MENA and adjacent regions
5 5
Global Footprint UK
Canada
U.S.
Egypt
UAE
Nepal
B’Desh Nigeria
Australia Domestic Mfg. Locations
Key markets Manufacturing Facilities Our strategy is to localize manufacturin g, supply chain and product offerings to suit consumer requiremen ts in each geography 6 6
Robust Distribution Network Factory
Stockist
Super Stockist
Institutions trade
W holesalers
Sub Stockist
RETAIL TRADE CONSUMERS Direct + I ndirect Reach covering 2.8 Mn R etail Outlets 7 7
Research & Development Strengths Team of scientists including Ayurvedic doctors, Pharm acists, Agronom ists, Botanists, Tissue Culture specialists, etc.
Strong New Prod uct Development
Ayurvedic Medicines
P ersonal Care oo s
Agronomy Initiatives
Protecting endangered herbs
Technical assistance to farmers
Contract cultivation of herbs
Green House at Nepal
Dabur Research Facilities
Home Care
OTC Healthcare
D ab u r i n t r o d u c ed m o r e t h a n 1 5 n e w p r o d u c t s/ v a r i an t s d u r i n g FY1 0
Greenhouse at Dabur Nepal
8 8
Ayurveda – The Science of Life
Ayurveda – The core philosophy
Traditional Indian system of medicine
Ayurveda, the ancient Indian system of medicine based on natura an o istic iving, erives rom two Sans rit words - Ayu or life, and Veda or knowledge.
This Science of Life analyses the human body through a combination of the body, mind and spirit. , , researched by Dabur in its quest for natural remedies. Today, its application in modern life has been renewed through the scientific research and validation undertaken at Dabur
Dabur has 125 years experience & knowledge in Ayurveda
Successful extension of Ayurveda into personal
Riding global trend of “Back to Nature”
9 9
Index
Dabur India-Introduction FMCG I ndustry Scenario
Growth Strategy Recent Performance
10 10
FMCG Industry Snapshot Key Highlights
FMCG Industry Size
Indian FMCG industry around US$ 25 bn.
size
estimated
Personal care & Food products dominate the
in Rs. billion
Many categories are currently small and offer huge potential
FMCG Industry Size
Steady double digit growth in the sector
Growth rate (%)
ura n a con r u es c. FMCG sector.
o
at MAT Dec 2008
MAT Dec 2009
1,023.9
1,161.1 13.4%
e overa
Source: AC Nielsen
FMCG Grow th : Urban & Rural
Category-w ise share of the Sector
20%
16% 15%
15% 12%
9%
10%
10%
18%
Baby Care 2%
11%
OTC Produc ts 4%
12%
12%
Personal Care 22%
Hair Care
10% 5%
Household Others 4% 5%
3% 1% -1%
0%
-5%
CY03 -8%
CY04
-10%
Source: AC Nielsen
CY05
U rban
CY06
CY07
CY08
CY09
Fabric Care 12%
Food Products 43%
Ru ral
Source: AC Nielsen 11 11
India: Consumption Story ggregate in trillion, Indian Rupees, 2000
onsumpt on across
ncome
rac ets 70
4x
34
7
Middle Class
10
Middle Class Source : Mckinsey Global Institute Analysis
By 2025, I ndia is poised to become the w orld's fifth largest consuming country from current position of tw elfth o e: 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 12 12
Penetration Levels: Sufficient Headroom 90%
80%
77%
80%
67% 57%
60% 50%
42%
40%
37%
32%
30%
18%
18%
10% 0%
Toothpaste
Shampoo
Hair Oil
Rural Penetration
Skin Cream
Mosquito Re ellants
Urban Penetration
Source: Industry Data, IIFL
Low penetration levels offer room for growth across consumption categories Rural penetration catching up with urban penetration levels
13 13
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
7.7
7.4
8
.
3
2.4
2.5 7 2
6 5 4
1.5
3.2
1.1
1.0 1
3 2
0.8
1
0.3
0.5
0.3
0
0
China
Indonesia
India
Malaysia
China
Thailand
Indonesia
India
Malaysia
Thailand
Toothpaste – Per Capita Consumption (in US$) in US$ 3.5
2.9
3
2.5
.
2
1.5
1
1.0 0.5
0.4
0.5
0
China
Indonesia
India
Malaysia
Thailand
Source: MOSL 14 14
Key Players: FMCG USD Million
Company
Hindustan Unilever Ltd Nestle India Ltd*
Key Categories ,
,
Foods Food, Beverages, Infant nutrition
Sales ,
P rofit
M arket Cap
4,479
538
12,011
1,101
141
6,126
Person al, Health & Homecare, Foods Britannia I ndustries Ltd*
Biscuits
, 734
33
969
Colgate Palmolive (I) Ltd* Oral Care & Toiletries
364
62
2,462
Marico Ltd.
Hair care, Food, Skincare
571
49
1,639
Glaxo Smithkline Consumer*
Consumer Health Care
412
50
1,615
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 *Year ending 31.12.09 ^Year ending 30.06.09
Note: Market Cap. as of 29.07.10 15 15
Dabur: Strong Presence in FMCG Categories Category
P osition
Market Share
Key Brands
Hair Care
3
12%
Oral Care
3
13%
Skin Care
3
7%
Chyawanprash
1
63%
Dabur Chyawanprash
Digestives
1
55%
Hajmola
Fruit Juices
1
52%
Real Fruit Juices Real Activ
Honey
1
50%
Dabur Honey
Glucose
2
24%
Dabur Glucose
Dabur Amla hair Oil, Vatika hair oil &
Red toothpaste, Babool, Meswak, Red toothpowder Dabur Gulabari, Fem, Dabur Uveda
Hair care includes Hair Oils & Shampoos; Oral care includes Toothpastes & Toothpowder; Skin care includes moisturizers, 16 face cleaning, lightening, anti ageing & other skin care products; Digestives includes herbal digestives
16
Index
Dabur India-Introduction FMCG Industry Scenario
Growth Strategy Recent Performance
17 17
Business Structure Business Unit
Consu mer Care Division
Revenue Share
Description FM CG portfolio comprising distinct businesses: P e r so n al Ca re H e al th Ca re H om e Ca re Foods
four
• •
72%
• •
Consu mer Health Division
International Business
Range of ethical and OTC products Ayurveda in modern ready-to-use formats
needs of custom ers across different international markets spanning M iddle East, North & W est Africa, South Asia, EU and US through its b ra nd s Da bu r a nd V ati ka
18%
Note: Percentage share in revenue based on FY10 Financials ; Femcare included in Consumer Care Division
18 18
Consumer Care Division Overview HCPD
FP D
2003-2004
Balsara
Foods
FEM
2006-2007
2007-2008
2008-2009
CCD
FPD: Family Products Division HCPD: Health Care Products Division Foods division was a 100% subsidiary of DIL Category-w ise Share of CCD Sales Home Care 6%
Foods 16%
Hair Care 29%
CCD Sales - Historical in Rs. m illion
Skin Care 6% Digestives 8% Health Supplemen ts 17%
Oral Care 18%
Note: Percentage share in revenue for H1 FY11 19 19
Brand Architecture
Starting from Ayurveda, the company successfully ventured into herbal arena becoming the ‘Herbal Specialist’ While herbal businesses form the core with 85% of revenues, the company’s growth ambitions are not limited by it. A robust brand architecture ensures that the core values remain intact
Brand Architecture Herbal Space
Dabur Herbal ea care
Vatika Premium Personal Care
Rs 17.0 bn Rs 3.9 bn
Natural / Non-herbal Space
Hajmola Tasty ges ves
Uveda Ayurvedic n care
Rs 1.4 bn
NA
Real Fruit everages
Rs 3.0 bn
Balsara FEM Home Care Fairness Skin so ut ons
Rs 1.3 bn
Rs 1.0 bn
Brand size pertains to FY2008-09 sales in India and overseas; Fem had sales of about Rs.30 mn in overseas markets in FY09
20 20
Consumer Care Categories Key Brands
Market Share 7% 37%
16% 3%
6% 31%
Bajaj
Dabur
Dey's Medical
Emami
Marico
Others
Dabur Amla: Largest brand in the portfolio
Value Share-ACN June, 09
Anmol Hair Oil: Value proposition
Key Brands
Market Share
13.5%
Vatika: Value added coconut oil
11.2%
6.0%
23.8% 45.5%
Cavi nkare
Dabur
P&G
Others
HUL
Vatika range o s ampoos
Value Share-ACN Mar, 10 21 21
Consumer Care Categories (Contd.) Key Brands
Market Share 14.3% 13.2% 49.7%
22.8% Colgate
HUL
Dabur
Others
Dabur Red: Toothpaste & Toothpowder
Babool: Targeted at economy segment
Value Share-ACN March, 2010
Meswak: Premium therapeutic toothpaste
Health Supplements Key Bran s Chyawanprash – Market Share 5.6%
11.1%
12.7%
7.9%
62.7%
Baid anath
Dabur
Emami
Value Share-ACN March, 2010
Zandu
Other s
Dabur Chyawanprash: Largest selling health supplement in the country
Dabur Glucose: 2nd largest player in the country
branded honey in the country; growing category through replace 22 sugar strategy 22
Consumer Care Categories (Contd.) Key Brands
Market Share 13.0%
52.0%
35.0%
Dabur
Pepsi
Others
Company Est. Mar, 2010 for Fruit Juice category
Real: Flagship beverages brand
Real Activ: Range of 100% pure juice
Key Brands
Market Share* 18.0% 58.9% 3.2% 6.4%
6.6% 6.8%
n u s an ever Loreal
mam Cavin Care
a ur Others
*Company estimates; Includes Fem skin care portfolio
Gulabari range of rose based skin care products: Moisturizer, Face freshener & Rose water
Fem Skin care : Acquired recently 23 23
Consumer Care Categories (Contd.) Key Brands
Market Share 37%
55%
8%
Haj mola
Satmola
a mo a: ags p ran for branded Digestives
Others
a mo a as y digestive candy
Value Share-ACN March, 2010
Home Care Key Brands
Air Fresheners – Market Share 20%
26%
20%
5%
30%
Odonil: Air freshner Value Share-ACN March, 2010 for Aerosols category range: Largest brand
in the portfolio
Odomos: Mosquito repellant skin cream
Sanifresh: Toilet cleaner 24 24
Consumer Health Division escr p on
CHD: Repository of Dabur’s Ayurvedic Healthcare knowledge Plans underway to build a comprehensive space Range of over 260 products Focusing on multiple therapeutic areas. Distribution coverage of 200,000 chemists, ~12,000 vaidyas & 12,000 Ayurvedic pharmacies
OTC (64% )
ETHI CAL (36% )
Generics
Tonic
Branded Products
Classicals
Branded Ethicals
Healthcare Focus
OTC Healthcare is Rs.130 billion size industry Expected to grow at 14-15% p.a. as preference for Over-the-Counter products
Herbal Cough & Cold Syrup
Mint based medicine for digestion
Dabur to expand its presence by : Consolidating / expanding current portfolio Launchin new roducts in emerging therapeutic areas Look at inorganic opportunities Promoting Dabur Ayurveda: Generating equity for Ethical portfolio
25 25
OTC Health Care Portfolio Gastro In testinal
Cough and Cold
Honitus
Pudin Hara
Women’s Health
Rejuvenation
M emory Enhancer
Shilajit
Medicated Oils
Shankha Pushpi
Dabur Active Blood Purifier Baby Care
Badam Tail
Rubs and Balms
Balm Strong 26 26
International Business Division
Started as an Exporter
Set u a franchisee at Dubai in 1989
Renamed franchisee as Dabur International Ltd
Buildin scale-20% of overall Dabur Sales (FY09)
Focus on Order fulfillment through India Mfg.
Demand generation led to setting up of mfg in Dubai & Egypt
Local operations further strengthened
High Levels of Localization
Set up new mfg facilities in Nigeria,RAK & Bangladesh
Global Supply chain
1980’s
Early 90’s
2003 Onw ards
Highlights
’ to consolidated sales led by CAGR of 29% in last 6 years Focus markets: GCC
Today
High Growth in I BD in Rs. m illion
Nigeria Bangladesh Nepal U.S. High level of localization of manufacturing and sales and marketing Leveraging the “Natural” preference among local consumers to increase share in personal care categories Sustained investments in brand building and marketing
ew pro uc s con r u ng significantly to overseas sales
27 27
International Business – Product Portfolio Existing P roducts Hair Oils
N P Ds and Relaunches Vatika Shampoos
Vatika Conditioners
V at ik a H am am Za it h – Hair Fall Control
Dabur Herbal Toothpaste
Hair Creams
Hair Treatments
V at ik a H a ir O i l
V a ti k a D er m oV iv a So a ps
28 28
Index
Dabur India-Introduction FMCG Industry Scenario
Grow th Strategy Recent Performance
29 29
Growth Strategy EXPAND
INDIA LIMITED
ACQUIRE
INNOVATE
THREE PRON GED STRATEGY FOR SUSTAI NI NG GROW TH
30 30
Expansion Strategy Strengthening new categories Skin Care: Ayurvedic skin care range under a new brand launched; Acquisition of Fem OTC Hea t care: Leveraging Ayurveda knowledge for a range of OTC herbal products Fruit Drinks and Culinary: Entry into the fast growing fruit
Targeting inorganic opportunities Market Entry: Acquisitions critical for building scale in existing categories & mar ets Synergies : Should be synergistic and make a good strategic fit Geographies: Opportunities in
Real franchise
Strong innovation programme Contribution: New products to contribute 5-6% of revenues Focus Categories: New roduct activations lanned u in all categories Renovation: Periodic brand renovations to keep older products salient
Expanding across geographies Overseas markets: 20% of overall company; target to sustain higher growth rates South In dia: Increased contribution from 7% to 12%; Continued focus on the relevant portfolio to grow contribution
31 31
Acquisition of Hobi Group, Turkey
Acquisition of Hobi Group, Turkey for a total consideration of US$ 69 Million completed on October 7, 2010
This is Dabur’s first overseas acquisition
Hobi manufactures and markets hair, skin and body care products under the brands Hobby and New Era complementary to our product range
Acquisition provides an entry into another attractive emerging market and a good
32 32
Index
Dabur India-Introduction FMCG Industry Scenario
Growth Strategy Recent Performance
33 33
Financial Performance – H1 and Q2 FY 2010-11 i n R s . Cr o r e s 2000
i n R s . Cr o r e s
1,628
1,905
1200
855
1000
1500
980
800 1000
600 400
500
200 0
0
H1FY10
Q2FY10
H1FY11
Q2FY11
Sales for H1FY11 increased by 17% and by 14.7% in Q2 FY11 primarily driven by volumes
i n R s . Cr o r e s
i n R s . Cr o r e s 200
300
228
267
150
139
160
100 100
50
0
0
H1FY10
H1FY11
Q2FY10
Q2FY11
PA T increased by 16.9% during H1 FY11 and by 15.4% in Q2 FY11 despite input cost inflation and in creased taxation
Note: PAT refers to Net Profit after Minority Interest
34 34
Stock Performance & Shareholding Pattern Market Capitalization in Rs. billion
Shareholding Structure*
170 , . %
Banks/FIs/ Insurance Cos., 6.9%
17
Indian Public and Others , 7.0 % Promoters, 68.7%
Mutual Funds, 0.9 %
2001
2010 *As on October 22, 2010
’ one of the
biggest
w ealth creators in the FMCG industry in this decade
35 35
Consolidated P&L Q2 FY11 and H1 FY11 n s. crores Gross Sales Less: Excise Duty Net Sales Other O eratin Income Material Cost % of Sales Employee Costs % of Sales Ad Pro % of Sales Other Expenses % of Sales EBI TDA % of Sales Interest Expenses Depreciation Amortization P rofit Before Tax (P BT) Tax Expenses Provision for Taxation for Earlier years % of Sales PAT(After exceptional Items) P AT (After Extraordinary item & M I )
980.5 7.7 972.8 10.1 458.5 46.8% 77.9 7.9% 121.5 12.4% 112.1 11.4% . 219.6 22.4% 4.6 14.2 4.7 196.0 35.6 . 16.4% 160.4 160.4
854.8 7.0 847.8 6.3 381.8 44.7% 72.2 8.4% 120.2 14.1% 98.4 11.5% . 188.9 22.1% 6.0 12.5 1.4 169.0 28.6 0.1 . 16.4% 140.3 139.0
o 14.7% 14.7% 58.9% 20.1% 7.8% 1.1% 13.9% - . 16.2% -23.6% 14.0% 230.1% 16.0% 24.4% . 14.4% 15.4%
1,904.8 15.6 1,889.3 18.7 893.1 46.9% 150.7 7.9% 272.2 14.3% 233.7 12.3% . 372.2 19.5% 9.1 27.7 5.7 329.7 61.9 . 14.1% 267.8 267.1
1,628.4 12.4 1,616.1 11.1 744.1 45.7% 135.9 8.3% 242.8 14.9% 202.2 12.4% . 316.0 19.4% 12.2 24.1 2.7 276.8 47.4 0.2 . 14.1% 229.2 228.5
o 17.0% 16.9% 67.9% 20.0% 10.9% 12.1% 15.6% . 17.8% -26.0% 14.8% 108.4% 19.1% 30.6% . 16.8% 16.9%
36 36
Consolidated Balance Sheet – Sept 30, 2010 . Sources Of Funds Shareholders' Fund: Share Capital Reserves & Surplus Minority Interest Loan Funds: Secured Loans Unsecured Loans
174.1 1,037.5 1,211.1 4.5 99.7 235.3
Deferred Tax Liability TOTAL Application of funds: Fixed Assets: Investments Current Assets, Loans & Advances Inventories Sundry Debtors Cash & Bank balances Loans & Advances Less: Current Liabilities and P rovisions: Current Liabilities Provisions Net Current Assets Miscellaneous Expenditure TOTAL
86.6 690.7 777.2 8.3 113.3 54.1
335.1 13.0 1,564
167.4 10.1 963
704.6
622.1
148.8 568.3 216.6 400.8 504.1
1,689.8 595.5 483.6 1,079.1 610.7 99.9 1,564
112.1 449.1 219.5 137.7 341.4
1,147.7 573.2 353.5 926.7 221.0 7.9 963
37 37
Accolades
Ranked 25th most valuable brand in the list ' Valuable Brands, by 4Ps.
aw arded the Top Marketer Award for 2009 in the Consumer Goods category by Pitch magazine
Listed in Forbes’ 200 Best Under-A-Billion Companies List
Dabur India Ltd was ranked the Business Leader in the FMCG Personal Care Category at the NDTV Profit Business Leadership Aw ard 2008
Ranked 79 th in 'Super 100' list announced by Business India
Ranked 182 in ET-500, the annual listing of India's Blue Chip companies by The Economic Times. Also ranked as the fourth largest pure-play FMCG company in the list.
Ranked 28th in ET-Brand Equity Most Trusted Brands 2009 list.
Voted as the fourth Most Liked Health Brand in the country in consumer survey conducted by 'Complete Wellbeing' magazine
38 38
Disclaimer This presentation has been prepared by Dabur India Limited (“Dabur“ or “Company”) for informational purposes only and should not be used as a basis for any investment and any investment related decisions/ analysis. o represen a on or warran y, express or mp e s ma e as o, an no re ance s ou e p ace on, the fairness, accuracy, completeness or correctness of such information or opinions contained herein. The information contained in this presentation is only current as of its date. Certain statements made in this presentation may not be based on historical information or facts and may be “forward looking statements”, including those relating to the general business plans and strategy of Dabur, its future financial condition and growth prospects, future developments in its n us ry an s compe ve an regu a ory env ronmen , an s a emen s w c con a n wor s or phrases such as ‘will’, ‘expected to’, ‘horizons of growth’, ‘strong growth prospects’, etc., or similar expressions or variations of such expressions. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results, opportunities and growth potential to differ materially from those suggested by the forward-looking statements. In no event shall the Company be liable for any direct, special indirect or consequential damages, or any other damages of any kind, including but not limited to loss of use, loss of profits, or loss of data, whether in an action in contract, tort (including but not limited to negligence), or otherwise, arising out of or in any way connected with the use of this presentation or the materials contained in, or accessed through, this presentation. No person is authorized to give any information or to make any representation not contained in , , must not be relied upon as having been authorized by or on behalf of Dabur. This presentation cannot be copied and disseminated in any manner.
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