Uncommon sense. April 2009

Transcription

1 Uncommon sense April 2009

2 Disclaimer This investor presentation has been prepared by Marico Limited ( Marico ) and does not constitute a prospectus or placement memorandum or an offer to acquire any securities. This presentation or any other documentation or information (or any part thereof) delivered or supplied should not be deemed to constitute an offer. No representation or warranty, express or implied is made as to, and no reliance should be placed 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 Marico, its future financial condition and growth prospects, future developments in its industry and its competitive and regulatory environment, and statements which contain words 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. These risks and uncertainties include, but are not limited to risks with respect to its hair care, its healthcare business and its skin care business. Marico may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. This presentation cannot be copied and disseminated in any manner. No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of Marico. This presentation is strictly confidential. 1

3 Sustained Profitable Growth 30,000 Strong Growth in Sales and Income (Rs. Mio) 25,000 20,000 15,000 10,000 5,000 11,439 CAGR 28% 15,569 19,067 23,884 Growth FY09 over FY08: 25% 0 FY06 FY07 FY08 FY 09 Growth from all businesses in FY09 Inflation led growth : 13% Organic volume Growth :12 % Inorganic Volume Growth : 1% 2 Source: Marico Annual Reports, Consolidated Financials for respective years

4 Sustained Profitable Growth EBITDA and EBITDA Margins 3,500 EBITDA EBITDA Margin 17.0% 3, % (Rs. Mio) 2,500 2,000 1,500 1, % 1, % 1, % 2, % 3, % 11.0% 9.0% 7.0% 0 FY06 FY07 FY08 FY % Margin band maintained in a year with high cost push Source: Marico Annual Reports, Consolidated Financials for respective years 3

5 Sundari Divestment Impact Marico Group One time PBT loss of Rs (15.03)crore Diminution is asset value in Sundari s books Tax shield on loss Rs 17.3 crore Net impact on PAT Rs 2.3 crore Marico Limited Standalone Provision for loans & interest Tax shield on loss Net impact on PAT Rs (47.8) crore Rs 17.3 crore Rs (30.5) crore Source: Marico Annual Reports, Consolidated Financials for respective years 4

6 Sustained Profitable Growth PAT before exceptional items CAGR 29% Rs Mio FY 2006 FY 2007 FY 2008 FY 2009 Growth FY09 over FY08: 21% 5

7 Sustained Profitable Growth Consistent Across Quarters * Sales and Services 34 consecutive quarters Since Q2 FY 01 Profit after Tax 38 consecutive quarters Since Q2 FY 00 * Growth in quarterly performance measured by comparing quarterly performance of the relevant quarter compared to similar quarterly period of the previous year 6

8 Coconut Oil Market Share PCNO 48% Nihar 6% OOM 1% Total CNO 55% FY09 Volume growth in rigid packs Parachute : 9% Nihar : 8% Loose, 1000 CNO Market (Rs Cr) Branded, 1500 Grow the branded market Conversion from loose to packed Micro Marketing Focus on smaller market segments Likely Medium Term Volume growth : 6% to 8% Market Share AC Nielsen 12 months ended Feb

9 Hair Oil Marico FY % 12 months ended February % Volume Growth (Rigids) FY09: 17% Shift from Loose Oil Higher incomes Higher frequency of usage Aim to gain market share Prototype of Nihar Naturals Coconut Cooling Oil Participate in Cooling Oils Segment Source: A.C.Nielsen All India Urban and Rural Market share for value added coconut oil, non-sticky hair oils, Amla and cooling oils 8

10 Post Wash Hair Care More Modern and Youth Products Currently small with modest growth Presence in category to leverage growth when it occurs 9

11 Saffola (Premium Refined Edible Oil) Strong Good for Heart positioning. Safflower Oil and its blends Volume Growth FY09 : 11% Introduced Saffola Active Exceptionally high premium to other brands H2FY09 Correction in premium in Q1 FY 10 Saffola Active at Rs 89, to bring more consumers into Saffola fold 10

12 From an edible oil to a Lifestyle Brand Riding a Healthcare Trend Low-Sodium Salt First in refined oil blends Edible Oil Functional Foods Space Lifestyle products 11

13 Strategic Funding On-going Prototypes to create a future pipeline of products Strategic funding is negative contribution after direct variable costs & ASP Company budgets for a % of profits for strategic funding each year. 12

14 New Product Pipeline Prototype Methodology Enables experimentation & de-risked growth Products Successfully Prototyped Saffola functional foods Cholesterol and Diabetes Management Atta Mix Revive Liquid Stiffener Parachute Advansed Starz - Cream Gel, Gentle Shampoo and non-sticky hair oil for kids Parachute Therapie Hair Fall Solution Parachute Advansed Revitalising Hot Oil 13

15 Current Prototypes Nihar Naturals Coconut Cooling Oil Revive Strong & White Saffola Rice Low GI rice for weight management Saffola Zest Healthy Baked (Not Fried) Snack 14

16 Modern Trade Currently about 6% of business Higher for Saffola and some new products Slowdown in store expansion Correction in overall inventory levels By and large no excessive delays in payments No large provisions required 15

17 Rural India Super-distributor sales ~ 25% of turnover Slightly higher margin & credit period New lower price point SKU in Parachute Some tweaking of ASP towards rural audience Rural thrust in select territories in FY10 16

18 International Business Group (IBG) Turnover (Rs mio) CAGR 45% Turbulent environment in FY09 High inflation / currency movements Growth in FY09-43%, including 15% owing to INR depreciation Turnover at 440 cr, now 18.4% of Group 17

19 IBG Bangladesh Marico Bangladesh FY09 turnover ~Rs 2 bn Parachute gaining market share steadily 73% (12 months ended February 2009) up from 67% on a year-on-year basis. Retail Reach ~ 3,70,000 Reach leveraged through new product introduction Hair Code hairdye Herbal hair dye 18

20 IBG - MENA GCC: Market share gains in hair creams & hair oils Commenced entry into new geographies Egypt: Changes made in supply chain structure Introduced distributors Led to revenue contraction in FY09 Transition completed Back on track for FY10 19

21 IBG South Africa Turnover in FY09 ~ Rs 500 million Smooth integration and Overall performance on track Caivil premium ethnic hair care brand restaged Hercules flavoured castor oil introduced FY10: New products prototypes and expansion in Southern Africa 20

22 Kaya Skin Care Solutions Turnover in FY09 Rs. 1.6 bn Growth of 57% Growth from clinics opened before Apr08 ~ 18% 85 Clinics 74 in India, 11 in the Middle East Added 20 clinics in FY 09 Customer base more than 500,000 Product revenue - 13% of Total FY 09 bottom-line Rs (160) mio Will turn positive in FY 10 21

23 Kaya Middle East Kaya clinics present in 11 centers 8 across UAE, 2 in Saudi Arabia and one in Oman Plans to open more clinics in these territories Current turnover at about Rs 410 million 22

24 Kaya Growth Clinic expansion 15 per year New catchment area for clinics Skin Zones (in malls) New Services & Products Kaya Care Annual membership program 23

25 Kaya Life Holistic Weight Management Sustainable weight loss Model being honed before scale up Four centers in Mumbai Juhu, Malad, Bandra and Vashi 24

26 Entrenched Brands Brand Category Indicative Market Share (%) # Rank Parachute Coconut Oil (India) ~ 48% 1 Parachute Coconut Oil (Bangladesh) ~ 73% 1 Saffola Refined Safflower Oil and its blends ~ 98% 1 Mediker Anti Lice Treatment ~ 90%* 1 Revive Instant Fabric Starch ~ 80%* 1 Parachute Jasmine, Shanti Amla, Hair & Care, Nihar Hair Oils ~ 22% 2 Dominant brand categories: Parachute, Saffola, Mediker Sector defining categories: Revive, Kaya * Company Estimates, # Market share data sourced from A.C. Nielsen for 12 month period ending March

27 Q4 FY 09 at a glance Q4 FY 09 Q4 FY 08 (Rs Cr) (Rs Cr) % change Group Turnover % PBT adjusted for exceptional items % Net Profit adjusted for exceptional items % 26

28 Operating Margin % to Sales Q4 FY 09 Q4 FY 08 Material Cost (Raw + Packaging) 50.8% 50.8% Advertising & Sales Promotion (ASP) 10.1% 15.2% Personnel Costs 7.6% 7.8% Other Expenses 18.4% 16.5% PBDIT 13.1% 9.6% Gross Margin (PBDIT before ASP) 23.2% 25.0% 27

29 Capital Expenditure & Funding 3 years Capex for Kaya Rs 500 million Normal Capex Rs 500 million Debt at present Rs 3.8 billion (Net Debt Rs 2.7 billion) Operating cash flows sufficient to service this debt Acquisitions??? To maintain quantum of dividend, reduce payout %. Fresh equity only if a large acquisition opportunity is available 28

30 Performance in Numbers FY06 FY07 FY08 FY 09 (Rs. crore, except ratios) Sales/ Services Income 1,144 1,557 1,905 2,388 EBITDA Net Profit after Tax Equity Capital Net worth EPS (Rs.) EBITDA Margin (%) PAT Margin (%) Source: Marico Annual Reports, Consolidated Financials for respective years 29

31 RM Input Outlook Copra & safflower likely to be lower than FY09 Copra higher MSP announced by Government May limit the decline, but unlikely to raise average market rate to MSP level Crude oil based derivatives could be lower than in FY09 Liquid paraffin / HDPE 30

32 Outlook Focus on maintaining growth momentum ~10% in volume terms Likely to be higher in Kaya & IBG IBG can vary based on INR movement vs. multiple currencies Margin expansion aided by lower input costs Continue to invest in established and new brands / territories No significant change in competitive landscape 31

33 Recognition in all spheres of business Rated India s one of most innovative companies (BT 2008) Ramkrishna Bajaj Award for Quality Jalgaon wins CII award for Water Management Asia Star Award for Parachute Packaging innovation Kaya wins Star retailer Award 08 32

34 Recognition in all spheres of business Saffola continues EFFIE winning streak also adds EMVIE & ABBY to its kitty Marico Corporate Brand: Clean Sweep at Remmies Bangladesh: Parachute becomes 6th most trusted brand Marico wins Economic Times Smart Workplace Award SPJIMR Award for IT in Sales 33

35 Thank You