ms investor presentation jun 2011 v1

8/3/2019 MS Investor Presentation Jun 2011 v1

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D ABUR INDIA LIMITED

June 2011, Mumbai

Morgan Stanley - India Summit

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FMCG GROWTH STORY

India FMCG Sector – Volume and Value Growth Rate (Y-o-Y % )

High Growth Phase

Source: Industry data, Standard Chartered Research

India’s FMCG sector reported steady sales CAGR of 11.2% over FY00-10 on theback of strong annual volume growth of ~8.5%.

,changing lifestyles and favorable demographics

As per a recent study conducted by Booz & Company, FMCG sector is expectedto grow in the range of 12% to 17% upto 2020 and would touch a market size

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between of Rs. 4,000 to Rs. 6,200 billion



FMCG – CURRENT SCENARIO

FMCG Split: OTC, Food and Non-Food FMCG industry pegged at US$30billion in CY10

140,000 128,580Rs. Crores

e en re sec or, oo s52%, Non-Food at 45% and OTC 3%

Rural sector accounts for about 33%of total revenue

80,000

100,000

120,000

OTC

PRODUCTS

Non‐Food

(11%)

(8%)

(14%)

(19%)(10 %)

(14 %)

82,615

97,276

,

46

46

45

4

4

4

3

FMCG Sales – Channel Breakdown

20,000

40,000

60,000 Food Products

(14 %)(20 %)

(22%)48

48

50

5052

Source: AC Nielsen

0

MAT Sep'07 MAT Sep'08 MAT Sep'09 MAT Sep''10

5.8%

3.3%

5.0%

5.9%

Of the 7.8 million retail outlets forFMCG, Grocers are the dominant

format

58.6%

13.2%

8.2%

Modern Trade contributes to 6%of FMCG sales

Grocers General Stores Chemists

Paan Plus Food Stores Others

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3

Source : AC Nielsen



PENETRATION LEVELS: SUFFICIENT HEADROOM

80%

90%

Rural Penetration Urban Penetration

67%

57% 59%60%

70%

80%

42%

37%

32%30%

40%

50%

18% 18%

3% 2%4%

19%

5%10%

20%

0%

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 Rural penetration catching up with urban penetration levels

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PER CAPITA CONSUMPTION: ROOM FOR GROWTH

Skin Care – Per Capita Consumption (in US$) Shampoo – Per Capita Consumption (in US$)

India has low per capita consumption as compared to other emerging economies

7.4 7.7

5

6

7

8

9 2.72.4

2

2.5

3

in US$in US$

3.2

0.80.3

0

1

2

3

4 1.0 1.1

0.3

0

0.5

1

1.5

China Indonesia India Malaysia Thailand China Indonesia India Malaysia Thailand

Toothpaste – Per Capita Consumption (in US$)

2.9

2.02

2.5

3

3.5in US$

0.5

1.0

0.4

0

0.5

1

1.5

5

5

Source: MOSL



DABUR OVERVIEW

Established in 1884 - more than 125 Yearsof Trust & Excellence

Eleven Billion Rupee Brands

World’s largest in Ayurveda and natural

healthcare. .

Rs. 5.7 billion in FY2010-11

Strong brand equity

Vatika and Real are Superbrands

Hajmola , Real & Dabur ranked amongIndia’s Most Admired Brands

11 Brands with sales of over Rs. 1 billioneach

Wide distribution network covering 2.8m on re a ers across e coun ry

17 world class manufacturing plantscatering to needs of diverse markets

Dabur ranked200 in theFortune India500 list

Dabur movesup to take the78th spot in theSuper-100list, released by

Dabur rankedamong MostTrusted Brands inIndia, according toBrand Trust

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rong overseas presence w

contribution to consolidated sales

Business India Report, IndiaStudy, 2011



FINANCIAL PERFORMANCE

Sales

i n Rs . m i l l i on

12,004 12,849 12,356 14,170 17,565

20,80323,963

28,34134,158

,

15000

20000

25000

30000

35000

40000

45000

0

5000

FY02 FY03 FY04^ FY05 FY06* FY07 FY08 FY09 FY10** FY11^^

in %

EBITDA Margin (in % ) Net Profiti n Rs . m i l l i on

2,142 2,8173,329

3,9135,032

5,686

30004000

5000

6000

13.3%

15.3%

17.1%18.1% 18.5% 18.3%

. .

14.0%

16.0%

18.0%

20.0%

.

, ,

0

1000

2000

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11

10.0%

12.0%


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^Sales show a decline in FY04 on account of de-merger of Pharma 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 topline in FY11



GLOBAL FOOTPRINT

UK

Turkey

U.S.Egypt

UAENepal

B’Desh

Nigeria

Domestic Mfg.Locations

Manufacturing Facilities

Key markets

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,and product offerings to suit consumer requirements

in each geography



ROBUST DISTRIBUTION NETWORK

Factory

C&FA

(Carry & Forward Agents)

oc s uper oc s Institutions& Modern

trade

Wholesalers Sub Stockist

RETAIL TRADE

CONSUMERS

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Direct + Indirect Reach covering c.3 million Retail Outlets



PRESENCE IN FMCG CATEGORIES

Market SharePosition Key BrandsCategory

Hair Care

Oral Care

12%3Dabur Amla hair Oil, Vatika hair oil & Vatika Shampoos

13%3 Red toothpaste, Babool, Meswak, Red

7%3 Dabur Gulabari, Fem, Dabur UvedaSkin Care

AyurvedicTonics 67%1 Dabur Chyawanprash

Fruit Juices 52%1 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

ucose a ur ucose



BUSINESS STRUCTURE

Dabur operates through three focused Strategic Business Units

Business Unit Description

FMCG ortfolio com risin four

RevenueShare

Consumer CareDivision

distinct businesses:• Personal Care• Consumer Health Care• Home Care

68%

Consumer HealthRange of ethical and OTC products

- Division Ayurveda in modern ready-to-use

formats

InternationalBusiness

Catering to health & personal careneeds of customers across differentinternational markets spanningMiddle East, North & West 22%

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, ,through its brands Dabur and Vatika

Note: Percentage share in revenue based on FY11 Financials ; Hobi and Namaste included in International Business Division



CONSUMER CARE DIVISION OVERVIEW

HCPDFPD Balsara Foods FEM

FPD: Family Products Division

2003-2004 2006-2007 2007-2008 2008-2009

HCPD: Health Care Products Division

Balsara and Fem were acquisitions

Foods division was a 100% subsidiary of DIL

i n Rs . mi l l i on

CCD Sales - HistoricalCategory-wise Share of CCD Sales

Home

10,158 12,250

14,01316,392

18,65820,301

23,265

27,912

15000

20000

25000

30000Hair Care28%

Skin Care6%

Care

6%

oo s15%

0

5000

10000


Oral Care17%

HealthSuppleme

nts20%

8%

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Note: Percentage share based on revenue for FY11



CONSUMER CARE CATEGORIES

Market ShareKey Brands

Hair Oil

8%15%

42%

30%

5%

Bajaj Dabur Marico Emami Others

Dabur Amla: Vatika: Value added Anmol Hair Oil:

the portfolio

-

Ke Brands

Shampoo

10%6%

14%

Market Share

46%

Cavinkare Dabur HUL

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P&G Others

Vatika range of shampoosValue Share-ACN MAT Dec-2010




14.0%


Oral Care

50.0%

13.0%

23.0%

Colgate HUL Dabur Others

Value Share -ACN MAT Mar, 2011

Dabur Red: Toothpaste& Toothpowder

Babool: Targeted ateconomy segment

Meswak: Premiumtherapeutic

Chyawanprash – Market Share Key Brands

Health Supplements

13.4%

66.8%

6.6%

2.7%10.5%

Baidyanath Dabur Emami

Zandu Others

Dabur Honey: Largest

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Volume Share-ACN MAT - Mar, 2011

Largest selling health

supplement in thecountry

a ur ucose:2nd largestplayer in thecountry

branded honey in the

country; growingcategory through replacesugar strategy





Foods

52.0%13.0%

35.0%

Dabur Pepsi Others

Real: Fla shi Real Activ: Range

Market Share*

ompany st. ar, or ru t u ce category

beverages brand of 100% pure juice

Ke Brands

Skin Care

58.9%

6.4%

3.2%

18.0%

6.8%

6.6%

Hindustan Lever Emami Dabur

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Loreal Cavin Care Others

*Company estimates;Includes Fem skin care portfolio

based skin care

products:Moisturizer, Facefreshener & Rose water

Fem Go B eac :Launched recently

Ayurvedic Skin

Care




Market Share Key BrandsDigestives

56%

8%

Hajmola Satmola Others

Value Share-ACN MAT Mar 2011 for Herbal Di estives

Hajmola: Flagship brandfor branded Digestives

Hajmola tastydigestive candy


Home Care

69%12%

19%

Odomos Good Knight Others

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Value Share-ACN March, 2011 for Mosquito

Repellants Cream category

range: Largest brand

in the portfolio

repellant skin cream

Toilet cleaner



CONSUMER HEALTH DIVISION

Description

CHD: Repository of Dabur’s AyurvedicHealthcare knowledge

CHD Structure

Focusing on multiple therapeutic areas.

Distribution coverage of 200,000

chemists, ~12,000 vaidyas & 12,000

OTC 64%

Generics

Branded Products

ETHICAL 36%

Tonic

Classicals yurve c p armac es

Focus on growing the OTC Health-Careportfolio aggressively

ran e ca s

OTC Healthcare is Rs.130 billion size

Healthcare Focus

Expected to grow at 14-15% p.a. aspreference for Over-the-Counter productsaccelerates

Honitus: Day & Nightfor Cold and Flu relief

Pudin Hara LemonFizz for digestion

Consolidating / expanding currentportfolio

Launching new products in

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Promoting Dabur Ayurveda: Generatingequity for Ethical portfolio

Look at inorganic opportunities



INTERNATIONAL BUSINESS DIVISION

Started as anExporter

Focus on Orderfulfillment throughIndia Mf .

Set up a franchisee atDubai in 1989

Demand generationled to setting up of mf in Dubai & E t

Renamed franchisee as DaburInternational Ltd

Local operations further strengthened

Set up new mfg facilities in Nigeria,RAK

Building scale-22% of overall Dabur Sales (FY11)

High Levels of Localization

Global Supply chain

1980’s Early 90’s 2003 Onwards Today

8,9229000

10000

Highlights

Dabur’s overseas business contributes 22%to consolidated sales led by CAGR of 32% inlast 6 years

High Growth in IBD


1,8072,258

2,9173,760

4,770

6,025

3000

4000

5000

6000

7000 Focus markets:

GCC

Egypt

Ni eria ,

0

1000


Turkey

Bangladesh

Nepal

High level of localization of manufacturingand sales and marketing

Leveraging the “Natural” preference amonglocal consumers to increase share in personal

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significantly to overseas salescare categories

Sustained investments in brand building andmarketing



OUR STRATEGY

Three pronged Growth Strategy

Our d i f f e ren t i a t i on i s th e herba l and ayu rved i c p lat f o rm

Expand Innovate Acquire

Expand

Strengthening presence in existing categories and markets as well entering new geographies

Maintain dominant share in cate ories where we are cate or builders like HealthSupplements, Honey etc. and expand market shares in other categories

Calibrated international expansion – local manufacturing and supply chain to enhance flexibility / reduce response time to change in market demands

Innovate

Strong focus on innovation. Have rolled out new variants & products which have contributed toaround 5-6% of our growth p.a.

Acquire

Acquisitions critical for building scale in existing categories & markets

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ou e synerg s c an ma e a goo s ra eg c

Target opportunities in our focus markets



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

complementary to our product range

Acquisition provides an entry into anotherattractive emer in market and a oodplatform 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

Namasté is a leading ethnic hair care products company, having products for women of colour, with revenues of about $93 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..

billion and tap into significant market opportunity in the fast growing, hugely populated (~1Bn) yet highly underpenetrated consumer markets of Sub Saharan Africa

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

19.8% 19.9%2 5 . 0 %

Sales: FY11 v/ s FY10


EBITDA Margin: FY11 v/ s FY10

in %

5 . 0 %

1 0 . 0 %

1 5 . 0 %

2 0 . 0 %34,158,

1 5 0 0 0

2 0 0 0 0

2 5 0 0 0

3 0 0 0 0

3 5 0 0 0

4 0 0 0 0

0 . 0 %

FY10 FY11

0

5 0 0 0

FY10 FY11

PAT: FY11 v/ s FY10 Sales for FY11 increased by

5,032 5,686

4 0 0 0

5 0 0 0

6 0 0 0

i n Rs . mi l l i on . ,acquisitions

EBITDA margin was maintained

despite input cost inflation

0

1 0 0 0

2 0 0 0

3 0 0 0

FY10 FY11

PAT grew by 13.0% despite increase inin tax rate

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STOCK PERFORMANCE AND SHAREHOLDING PATTERN

Shareholding Structure*Market Capitalization in Rs. billion

FIs/

MFs/Ins.

Cos., 7.1%

FIIs, 17.4

%Indian

Public andOthers, 6.7

%

190

Promoters,

68.7%

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*As on May 6, 2011

Dabur ranked as the organization that offers the best return to investors by

the 6th Social & Corporate Governance Aw ards, presented by the BombayStock Exchange

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CONSOLIDATED P&L

In Rs. crores Q4FY11 Q4FY10 YoY (%) FY11 FY10 YoY (%)

Gross Sales 1117.2 855.1 30.7% 4,109.9 3,415.8 20.3%

Less:Excise Duty 9.0 6.5 32.4 25.3

Net Sales 1108.2 848.6 30.6% 4,077.4 3,390.5 20.3%

Other Operating Income 7.4 9.7 ‐23.5% 33.0 25.3 30.8%

Material Cost 489.0 384.3 27.2% 1,905.3 1,550.8 22.9%

% of Sales 43.8% 44.9% 46.4% 45.4%

Employee Costs 91.5 75.4 21.3% 322.2 284.7 13.2%

% of Sales 8.2% 8.8% 7.8% 8.3%

Ad Pro 127.4 115.6 10.2% 534.6 493.5 8.3%

% of

Sales 11.4% 13.5% 13.0% 14.4%

Other Expenses 194.7 111.3 74.9% 560.7 432.4 29.7%

% of Sales 17.4% 13.0% 13.6% 12.7%

Other Non Operating Income 16.3 7.5 117.6% 32.1 23.0 39.9%

EBITDA 229.3 179.1 28.0% 819.8 677.3 21.0%

% of Sales 20.5% 20.9% 19.9% 19.8%

. . . . . . . .

Depreciation 18.7 13.1 43.2% 62.4 50.3 24.1%

Amortization 6.2 1.8 245.8% 19.2 5.9 223.6%

Profit Before Tax (PBT) 188.4 159.0 18.5% 707.9 600.9 17.8%

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Tax Expenses 41.4 25.8 60.4% 139.0 100.5 38.3%

Profit After Tax (PAT) 147.0 135.5 8.5% 568.6 503.2 13.0%



CONSOLIDATED BALANCE SHEET

in Rs. crores As on Mar 11 As on Mar 10

Sources Of Funds

Shareholders' Fund:

Share Capital 174.1 86.9

Reserves & Surplus 1,217.1 848.5

1,391.2 935.4

Minority Interest 4.1 3.8

Loan Funds:

Secured

Loans 70.3 70.2Unsecured Loans 980.7 1,051.0 109.1 179.3

Deferred Tax Liability 18.9 10.7

TOTAL 2,465 1,129

Application of funds:

Fixed Assets:

Gross Block 1,933.7 985.7

less: Depreciation 435.1 339.1

Net block 1,498.6 646.6

Capital WIP 43.0 30.1

Investments 427.4 264.1

Current Assets,Loans & Advances

Inventories 708.5 426.2

Sundry Debtors 355.5 119.8

Cash &

Bank

balances 272.4 192.3

Loans & Advances 516.1 1,852.5 367.4 1,105.7

Less: Current Liabilities and Provisions:

Current Liabilities 714.0 466.9

Provisions 743.5 453.3

1,457.5 920.2

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Net Current Assets 395.0 185.5

Miscellaneous Expenditure 101.0 2.7

Deferred Tax

Assets

TOTAL 2,465 1,129



Investor Relations

Dabur India Ltd

Contact:+91-11-42786000

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ms investor presentation jun 2011 v1

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