DABUR INDIA LIMITED
CLSA - India Forum
November 2011
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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 witnessed uptick in growth in the later half of the previous
decade
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
to grow in the range of 12% to 17% upto 2020 and would touch a market size
between of Rs. 4,000 to Rs. 6,200 billion
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INDIA - RISING CONSUMPTION LEVELS
India with a share of 17.7% of world’s Projected Trajectory for Population – Various
Regions and India (Bns)
population is expected to become the most
populous country by 2025 as per UN
India accounts for 2.6% of global GDP and
3.3% of global consumption
India share in world’s total consumption has
grown steadily up from 2.5% in 1980s
Rising disposable incomes combined with
growing working population and favorable
demographics, have the potential to further
increase India’s share in global consumption
Source: UN, Citi
Trends in Disposable Income and Consumption
India’s Share in World Consumption (%)
Growth in India (Rs. bn, %)
Source: EIU, CSO, Citi Source: CEIC, CSO, Citi
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FMCG – CURRENT SCENARIO
FMCG Split: OTC, Food and Non-Food FMCG industry pegged at US$30
billion in CY10
140,000 128,580
Rs. Crores
120,000
116,053 3
(11%) Of the entire FMCG sector, Food is
97,276
4
(14%) 52% Non Food at 45% and OTC 3%
52%, Non-Food
100,000
82,615 4 (10 %) 45 (8%)
80,000 4 46 (19%) OTC PRODUCTS Rural sector accounts for about 33%
46 (14 %) Non‐Food
Food Products
of total revenue
60,000 48
,
40,000
52 (14 %)
(14 %)
50 (20 %)
20,000 48 50 (22%)
FMCG Sales – Channel Breakdown
0
MAT Sep'07 MAT Sep'08 MAT Sep'09 MAT Sep''10 (Growth %)
5.0%
Source: AC Nielsen 3.3% 5.9%
5.8%
8.2%
Of the 7.8 million retail outlets for 58.6%
FMCG, Grocers are the dominant
, 13.2%
format
Modern Trade contributes to 6%
of FMCG sales
Grocers General Stores Chemists
Paan Plus
Paan Plus Food Stores
Food Stores Others
Modern Trade
Source : AC Nielsen
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PENETRATION LEVELS: SUFFICIENT HEADROOM
Rural Penetration Urban Penetration
90%
80%
80% 77%
70% 67%
59%
60% 57%
50%
42%
40% 37%
32%
30%
26%
20% 18% 18% 19%
10%
5% 4%
3% 2%
0%
Toothpaste Shampoo Hair Oil Skin Mosquito Instant Hair Dyes Floor
Cream Repellants Noodles Cleaners
Source: Industry Data
Low penetration levels offer room for growth across consumption categories
Rural penetration catching up with urban penetration levels
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PER CAPITA CONSUMPTION: ROOM FOR GROWTH
India has low per capita consumption as compared to other emerging economies
Skin Care – Per Capita Consumption (in US$) Shampoo – Per Capita Consumption (in US$)
in US$ in US$
9 3 2.7
27
7.4 7.7
77
8
2.5
2.4
7
6 2
5
1.5
4 3.2 1.0 1.1
3 1
2
0.8 0.5 0.3
1 0.3
0 0
China Indonesia India Malaysia Thailand China Indonesia India Malaysia Thailand
Toothpaste – Per Capita Consumption (in US$)
in US$
3.5
2.9
3
2.5
20
2.0
2
1.5
1.0
1
0.5 0.4
0.5
0
China Indonesia India Malaysia Thailand
Source: MOSL
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INFLATION HEADWINDS
WPI has hovered in the 9% to 10% WPI (YoY Change %) – YTD FY12
range this fiscal, inspite of previous
year’s high base 9.7% 9.6% 9.5% 9.4% 9.8% 9.7%
agri based
Prices of agri-based and crude linked
inputs have witnessed sharp
increase, exerting pressure on gross
margins
Persistently hi h i fl ti
P t t
i t tl high inflation may start
impacting demand for FMCG Apr May Jun Jul Aug Sep
Domestic Coconut Oil Price (Jan-10 to June-11) Nymex Crude (Apr-10 till June-11)
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DABUR OVERVIEW
Established in 1884 - more than 125 Years Eleven Billion Rupee Brands
of Trust & Excellence
Among top 4 FMCG companies in India
World’s 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
Hajmola , Real & Dabur ranked among
H j l R l D b k d
India’s Most Admired Brands
11 Brands with sales of over Rs. 1 billion
each
Wide distribution network covering 2.8
million retailers across the country
Dabur ranked the Dabur ranked Dabur moves
17 world class manufacturing plants No. 2 Indian Green 200 in the up to take the
Brand by Green Fortune India 78th spot in the
catering to needs of diverse markets Brands Global 500 list Super-100
Survey list, released by
Strong overseas presence with around Business India
30% contribution to consolidated sales
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FINANCIAL PERFORMANCE
Sales
in Rs. million
50000
41,099
41 099
40000 34,158
28,341
30000
20,803 23,963
14,170 17,565
20000 12,004 12,849 12,356
10000
0
FY02 FY03 FY04^ FY05 FY06 FY07 FY08 FY09 FY10 FY11
EBITDA Margin (in %) Net Profit
in % in Rs. million
22.0% 19.8% 19.9%
20.0% 18.1% 18.5% 18.3%
17.1% 5,686
18.0% 15 3%
15.3% 6000 5,032
16.0% 5000 3,913
13.3% 4000 2,817 3,329
14.0% 2,142
1,065 1,558
3000
12.0% 2000
10.0% 1000
0
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
^Sales show a decline in FY04 on account of de-merger of Pharma business
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GLOBAL FOOTPRINT
UK
Turkey
Canada
Nepal
UAE
U.S. Egypt
B’Desh
Nigeria
Domestic Mfg.
Locations
Key markets
Manufacturing Facilities
Our strategy is to localize manufacturing, supply chain
and product offerings to suit consumer requirements
in each geography
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ROBUST DISTRIBUTION NETWORK
Factory
C&FA (Carry & Forward Agents)
Stockist Super Stockist Institutions
& Modern
trade
Wholesalers Sub Stockist
RETAIL TRADE
CONSUMERS
Direct + Indirect Reach covering c. 3 million Retail Outlets
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PRESENCE IN FMCG CATEGORIES
Category Position Market Share Key Brands
Dabur Amla hair Oil, Vatika hair oil &
Hair Care 3 12% Vatika Shampoos
Red toothpaste, Babool, Meswak, Red
Oral Care 3 13% toothpowder
Ayurvedic
1 67% Dabur Chyawanprash
Tonics
Digestives 1 56% Hajmola
Fruit Juices 1 52% Real Fruit Juices, Real Activ
Honey 1 50% abu o ey
Dabur Honey
Glucose 2 25% Dabur Glucose
Hair care includes Hair Oils & Shampoos; Oral care includes Toothpastes & Toothpowder; Skin care includes
moisturizers, face cleaning, lightening, anti ageing & other skin care products; Digestives includes herbal digestives 12
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BUSINESS STRUCTURE
Dabur India
Limited
Domestic International
Business Business
Consumer Dabur Hobi Namaste
Foods Retail Others*
Care
Care International Group Labs LLC
Labs. LLC
* Others includes Commodity Exports etc
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REALIGNED DISTRIBUTION FRAMEWORK
Hair Care
Home & Home Care
Personal Care
Oral Care
Skin Care
Consumer
Care Health
Supplements
DABUR
DOMESTIC FMCG
Digestives
Health Care
OTC & Ethicals
Culinary
Foods
Beverages
“Distribution re-aligned to capture greater synergy and scale: Consumer Health
Division merged into Consumer Care Business”
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CONSUMER CARE OVERVIEW
Category-wise Share of Consumer Care Sales
Skin Care
Oral Care 6%
19%
Home Care
7% Health
Supplements
17%
Digestives &
Hair Care Baby Care
32% 8%
OTC & Ethicals
11%
Hair Care is the largest category and contributes to nearly a third of Consumer
Care sales
Oral Care, comprising toothpastes and toothpowders contributes to 19% of
Consumer Care sales
Health S l t t ib t to fC C l
H lth Supplements contribute t 17% of Consumer Care sales
Note: Percentage share based on revenue for H1FY12 15
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CONSUMER CARE CATEGORIES
Hair Oils
Key Brands
#2 player in
Hair Oils
Dabur Amla: Vatika: Value added Anmol Hair Oil:
Largest brand in coconut oil Value proposition
the portfolio
Shampoo
Key Brands
#4 player in
Shampoos
Vatika range of shampoos
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CONSUMER CARE CATEGORIES
Oral Care
Key Brands
#3 player in
Toothpastes
p y
#2 player in
Meswak: Premium
Toothpowder Dabur Red: Toothpaste Babool: Targeted at
therapeutic
& Toothpowder economy segment
toothpaste
Skin Care
Key Brands
l i
#2 player in
Skin
Lightening
Gulabari range of rose Uveda: Range of Fem Gold Bleach:
based skin care Ayurvedic Skin Launched recently
products: Care
Moisturizer, Face
freshener & Rose water 17
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CONSUMER CARE CATEGORIES
Home Care
Key Brands
#1 player in Air
Fresheners
p y
#1 player in
Mosquito Repellant
Creams
Odonil: Air freshner Odomos: Mosquito Sanifresh:
l i T il t
#2 player in Toilet range: LLargest brand
tb d ll t ki
repellant skin cream Toilet cleaner
in the portfolio
Cleaners
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CONSUMER CARE CATEGORIES
Health S l t
H lth Supplements
Key Brands
#1 player in
y
Ayurvedic Tonics
#2 player in
Glucose
Dabur Honey: Largest
Dabur Chyawanprash: Dabur Glucose: branded honey in the
#1 player in Largest selling health 2nd largest country; growing
supplement in the player in the
branded Honey country
category through replace
country g gy
sugar strategy
Digestives
Key Brands
#1 player in
Herbal
Digestives
Hajmola: Flagship brand Hajmola tasty
for branded Digestives digestive candy
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CONSUMER CARE CATEGORIES
d Ethi l
OTC and Ethicals
Description
CHD Structure
Repository of Dabur’s Ayurvedic Healthcare
knowledge
Range of over 260 products
Focusing on multiple therapeutic areas. OTC (64%) ETHICAL (36%)
Distribution coverage of 200,000 Generics Tonic
chemists, ~12,000 vaidyas & 12,000
Ayurvedic pharmacies Branded Products Classicals
Focus on growing the OTC Health-Care Branded Ethicals
portfolio aggressively
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
accelerates
Dabur to expand its presence by :
Consolidating / expanding current
portfolio
Launching new products in emerging Promoting Dabur Ayurveda: Generating
therapeutic areas equity for Ethical portfolio
Look at inorganic opportunities
Acquired the energizer brand, Thirty
Plus from Ajanta Pharma in May 2011
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FOODS BUSINESS
Foods portfolio comprises Juices and Culinary range
Juices are under the brands – Real, Activ and Burrst
Culinary range i under H
C li is d brand
d Hommade b d
Foods
Key Brands
#1 player in
Fruit Juices
R l Fl
Real: Flagship
hi Real Activ: Range
beverages brand of 100% pure juice
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INTERNATIONAL BUSINESS
Middle East and Africa offer strong growth Real GDP Growth Rates (YoY) in %
potential in the long run for consumption
Africa has been touted as the “New Asia”
by Newsweek
b Ne s eek
As per Newsweek, growth in Africa is
driven not by the sale of raw
materials, like oil or diamonds, but by a
burgeoning domestic market
The rapidly emerging African middle class
could number as many as 300 million, out
of a total population of one billion
Much of the boom in this new consumer
class can be attributed to outside forces:
evolving trade patterns, particularly from
increased demand coming out of China
and technological innovation abroad
Source: IMF
We
“We can leverage our capabilities acquired in India over the years
to exploit growth potential in these markets”
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INTERNATIONAL BUSINESS
Started
St t d as an Set f hi t
S t up a franchisee at Renamed f
R d franchisee as Dabur
hi D b Building scale-32% of
B ildi l 32% f
Exporter Dubai in 1989 International Ltd overall Dabur Sales
Focus on Order Demand generation Local operations further strengthened (H1FY12)
fulfillment through led to setting up of Set up new mfg facilities in Nigeria,RAK High Levels of Localization
India Mfg. mfg in Dubai & Egypt & Bangladesh Global Supply chain
1980’s Early 90’s 2003 Onwards Today
Highlights High Growth in IBD
Dabur’s
D b ’ overseas b i t ib t
business contributes c. in illi
i Rs. million
32% to consolidated sales led by CAGR of 10000
8,922
32% in last 6 years 9000
8000
Focus markets: 7000
6,025
GCC
6000
4,770
5000
3 760
3,760
Egypt 4000
2,917
2,258
Nigeria
3000
1,807
2000 1,281
Turkey 1000
0
Bangladesh
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
Nepal
U.S.
High level of localization of manufacturing
and sales and marketing
Leveraging the “Natural” preference among
local consumers t i
l l h in l
to increase share i personal
care categories
Sustained investments in brand building and
marketing
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OUR STRATEGY
Three pronged Growth Strategy
Expand Innovate Acquire
Our differentiation is the herbal and ayurvedic platform
Expand
Strengthening presence in existing categories and markets as well entering new geographies
Maintain dominant share in categories where we are category builders like Health
Supplements, Honey etc. and expand market shares in other categories
Calibrated international expansion – local manufacturing and supply chain to enhance flexibility
p g pp y y
/ reduce response time to change in market demands
Innovate
Strong focus on innovation. Have rolled out new variants & products which have contributed to
5 6%
around 5-6% of our growth p.a.
Renovation of existing products to respond to changing demands (Toothpowder to Toothpaste)
Acquire
Acquisitions critical for building scale in existing categories & markets
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 total
consideration of US$ 69 Million completed on
October 7, 2010
Hobi manufactures and markets hair, skin and
body 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 another
attractive emerging market and a good
platform 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% stake
in 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 $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 (~1
B ) yet hi hl underpenetrated consumer markets of S b S h
Bn) t highly d t t d Africa
k t f Sub Saharan Af i
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RECENT FINANCIAL PERFORMANCE
Sales: H1 FY12 v/s H1 FY11 EBITDA: H1 FY12 v/s H1 FY11
in Rs. million in Rs. million
5 00 0 4,493
3 00 00
24,859
4 50 0
4 00 0
3,713
2 50 00
19 048
19,048 3 50 0
3 00 0
2 00 00
2 50 0
1 50 00 2 00 0
1 00 00 1 50 0
1 00 0
500 0
5 00
0 0
H1 FY11 H1 FY12 H1 FY11 H1 FY12
PAT: H1 FY12 v/s H1 FY11 Sales for H1 FY12 increased by
in Rs. million 30.5%, driven by mix of volume, price
and acquisitions
3500
2,671 3,016
3000
2500
EBITDA grew by 21.0%, inspite of
2000
1500
inflationary pressures
PAT grew by 12.9%
1000
500
0
H1 FY11 H1 FY12
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STOCK PERFORMANCE AND SHAREHOLDING PATTERN
Market Capitalization in Rs. billion Shareholding Structure*
174
17
2001 2011
*As on Sept 30, 2011
u d s organization that offers the best return to investors by
Dabur ranked as the o g o o s s u o s o s y
the 6th Social & Corporate Governance Awards, presented by the Bombay
Stock Exchange
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CONSOLIDATED P&L
In Rs. million Q2FY12 Q2FY11 YoY (%) H1FY12 H1FY11 YoY (%)
Gross Sales 12,697 9,805 29.5% 24,860 19,048 30.5%
Less:Excise Duty 74 77 191 156
Net Sales 12,623 9,728 29.8% 24,669 18,893 30.6%
Other Operating Income
Other Operating Income 84 98 ‐14 9%
14.9% 163 174 6.0%
‐6 0%
Material Cost 6,309 4,582 37.7% 12,599 8,927 41.1%
% of Sales 49.7% 46.7% 50.7% 46.9%
Employee Costs 1,014 779 30.3% 1,965 1,507 30.5%
% of Sales 8.0% 7.9% 7.9% 7.9%
Ad Pro 1,278 1,215 5.1% 2,792 2,722 2.6%
% of Sales 10.1% 12.4% 11.2% 14.3%
Other Expenses 1,657 1,121 47.8% 3,240 2,337 38.6%
% of Sales 13.0% 11.4% 13.0% 12.3%
Other Non Operating Income
Other Non Operating Income 106 67 58.1%
58 1% 257 139 84 4%
84.4%
EBITDA 2,555 2,196 16.4% 4,493 3,713 21.0%
% of Sales 20.1% 22.4% 18.1% 19.5%
Interest Exp. and Fin. Charges 172 46 275.5% 298 81 266.5%
Depreciation 175 142 23.0% 329 277 18.7%
Amortization 42 47 ‐10.8% 99 57 73.0%
Profit Before Tax (PBT) 2,166 1,960 10.5% 3,767 3,297 14.3%
Tax Expenses 427 356 20.0% 750 619 21.1%
PAT(Before Minority Int.) 1,739 1,604 8.4% 3,018 2,678 12.7%
% of Sales
% of Sales 13.7% 16.4% 12.1% 14.1%
Minority Interest ‐ (Profit)/Loss 0 1 2 7
PAT (After Minority Int) 1,739 1,603 8.4% 3,016 2,671 12.9%
% of Sales 13.7% 16.4% 12.1% 14.0%
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CONSOLIDATED BALANCE SHEET
in Rs. million As at As at
30.09.2011 30.09.2010
SHAREHOLDERS FUNDS :
(a) Capital 1,742 1,741
(b) Reserves and Surplus 13,579 10,375
MINORITY INTEREST 42 44
LOAN FUNDS 10,735 3,351
DEFERRED TAX LIABILITY (NET) 261 130
TOTAL 26,359 15,630
FIXED ASSETS 16,151 7,046
INVESTMENTS 2,075 1,488
CURRENT ASSETS, LOANS AND ADVANCES
(a) Inventories 7,695 5,683
( ) y
(b) Sundry Debtors ,
4,308 ,
2,166
(c) Cash and Bank balances 3,342 4,008
(d) Loans and Advances 6,083 5,041
21,429 16,898
Less : Current Liabilities and Provision
(a) Li biliti
( ) Liabilities 6,333
6 333 5 965
5,965
(b) Provisions 7,807 4,836
14,140 10,811
NET CURRENT ASSETS 7,288 6,086
(
MISCELLANEOUS EXPENDITURE (NOT
855 1 000
1,000
WRITTEN OFF OR ADJUSTED)
TOTAL 26,359 15,630
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Investor Relations
Dabur India Ltd
Contact:+91-11-42786000
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