Dabur India Ltd Investor Presentation August 2019
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The Way Forward 6. Our Capitals 7. Annexure 2
Dabur – leader in Ayurveda & Natural Healthcare Overview Awards Established in 1884 – 135 years of trust and excellence Dabur wins ICSI National Award for Excellence in Corporate Governance 2019 One of the world’s largest in Ayurveda and natural healthcare Dabur ranked in the India’s Top 50 Valuable Having one of the largest distribution network in India, Companies by Business Today covering ~6.7 mn outlets 20 world class manufacturing facilities catering to needs of diverse Dabur Red Paste rated as 2nd most trusted brand markets by the consumers in the Oral Care category by the Brand Equity India’s Most Trust Brands 2017 Strong overseas presence with ~27% contribution to consolidated sales Dabur moves up 4 Places in Fortune India 500 List ; ranked 163 in the list for 2015 Market cap: US$ Dabur ranked 25 in the list of Best Companies for 11bn CSR in India , according to the Economic Times 3
Manufacturing facilities located across the globe 12 manufacturing locations in India 8 international manufacturing locations UAE Baddi Jammu Sahibabad Egypt ` Alwar Tezpur Pantnagar Newai Nigeria Katni South Africa Turkey Narendrapur Silvasa Sri Lanka Nasik Pithampur Bangladesh Nepal 4
One of the largest distribution network in India Urban Rural Factory Factory C&F C&F GT Stockist MT Stockist Insti Stockist Super Stockist Wholesaler Sub Stockist Retailer Retailer Retailer Consumer Consumer Consumer Consumer Distribution reach of 6.7 mn retail outlets with direct reach of 1.1 mn+ 5
Strong financial profile CAGR : 11% 85.3 Revenue has become ~3x over the last 10 years • 78.3 78.7 77.0 77.5 70.9 61.7 53.1 Revenue from 41.0 34.0 Operations FY19 saw an adjusted growth of 11% in revenue • from operations FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Operating Profit (INR bn) Operating Profit Margin % 20.9% 20.4% 19.5% 19.6% 19.3% 18.9% 16.8% 16.7% 16.6% 16.0% 17.4 16.2 15.2 15.1 Operating Steady increase in operating margin, touching • 13.1 11.8 9.9 Profit 8.9 8 20.4% in FY19 6.4 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 PAT (INR bn) PAT Margin % 17.5% 16.9% 16.6% 15.9% 14.7% 13.9% 13.5% 13.2% PAT has grown at a CAGR of 11% over the last 10 • 12.4% 12.1% 14.4 13.5 12.8 12.5 PAT years 10.6 9.3 7.6 6.5 5.7 5.0 PAT margin went up to 16.9% in FY19 • FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 6 Note: All figures are in INR bn FY09 to FY15 is basis IGAAP, FY16 and FY17 are as per IndAS and FY18 and FY19 are as per IndAS and take into account GST
Q1 FY20 – Consolidated Financials 9.3% 2,273 Domestic business revenue grew by 11.0% led by volume growth of 9.6% • Revenue from 2,081 Operations International Business showing signs of recovery with CC growth of 7.7% • Q1 FY19 Q1 FY20 Consol Material cost remained steady at 50.5% in Q1 FY20 • 18.5% 458 Employee expenses increased by 3.2% during the quarter • Operating Media expenditure was at 8.9% in Q1 FY20 vs 9.6% in Q1 FY19 (Total adpro – • 386 Profit including CP and TP increased by 18%) Consolidated Operating Margin at 20.1% as compared to 18.6% in Q1 FY19 • (excluding the impact of IndAS 116, operating margin improved by 117 bps) Q1 FY19 Q1 FY20 363 10.3% Consolidated PAT increased by 10.3% - excluding Exceptional item growth in PAT • PAT was 14.2% 329 PAT margin improve by 15 bps to touch 16.0% • Q1 FY19 Q1 FY20 7 Note: All figures are in INR cr
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The Way Forward 6. Our Capitals 7. Annexure 8
Business Structure Domestic International (72.9%) (27.1%) Organic Acquired Domestic FMCG Others (contributes 2/3 rd of the (contributes 1/3rd of the (69.4%) (3.5%) International business) International business) 9 Note: The figures in the brackets are as per FY19
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The Way Forward 6. Our Capitals 7. Annexure 10
India Business – Category-wise Revenue FY19 Q1 FY20 Category Key Brands Contribution Growth Growth (FY19) 14.6% 19.6% Health Supplements 17.6% Healthcare 16.4% 18.2% Digestives 5.9% (32.3%) 13.7% 14.5% OTC & Ethicals 8.9% 14.8% 11.9% Hair Care 21.6% 9.5% 11.4% Oral Care 16.8% HPC (50.6%) 13.0% 10.9% Home Care 6.9% 17.2% 12.1% Skin Care 5.3% Foods 8.1% 1.5% Foods 17.1% (17.1%) 11 Note: Numbers in the charts represent GST adjusted growth (like-to-like)
Market Leadership in Most Categories Leading position in key categories across verticals #Relative Competitive Position 1 #1 #1 #2 #2 #2 #3 #1 #2 #1 #1 #1 Honey Chyawanprash Baby Glucose Hair Oils Oral Care Skin Toilet Cleaners Air Mosquito Juices Massage Care - Fresheners Repellant Oil Bleaches Creams Healthcare Home and Personal Care Foods 12 1. Position basis Nielsen Market Share data MAT Jun’19
Recent Product Launches Dabur Amla Kids Hair Babool Ayurvedic Real Oil & Shampoo Toothpaste Masala Range GlucoPlus C – Mango Real Mixed Berries Real Fruit ORS Flavour Fem Hair Removing INR 10 SKU of Real NatureCare Kabz Over Cream (Relaunch) Koolerz Mango 13
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The Way Forward 6. Our Capitals 7. Annexure 14
International Business Overview Sales (INR bn) • International Business comprises the Organic and Acquired business CAGR: 13% • Organic business (67% of international) is an extension of Indian portfolio with the same 27.1 24.2 23.1 23.2 23.2 21.8 personal care brands operating internationally 18.3 16.2 • Acquired business (32% of international) comprises Hobi and Namaste 8.9 • FY17 - FY19 were impacted due to geopolitical headwinds and severe currency devaluation in our key markets FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Region-wise Sales (FY19) Performance of Key Markets (FY19) FY19 Constant Currency Revenue Growth Rate Asia Middle East 29% 24.8% 27.1% 13% 13% 4% Americas (1%) 13.8% Africa (13%) Europe 22.1% 12.2% Egypt GCC SAARC Hobi Namaste SSA 15
Market Position in Categories in International Business Category Saudi Arabia Egypt UAE Nigeria Morocco Algeria US Turkey Hair Oil #1 #1 #2 #1 #1 Hair Cream #1 #1 #1 #1 #1 Hair Gel #1 #2 #1 #1 Hair Mask #1 #1 #1 Hair Serums #3 #3 #2 Shampoo #6 #6 #5 Leave-On #6 #3 Hair Color #5 Toothpaste #5 #4 #4 #3 #3 #3 Depilatories #3 #3 Relaxers #1 16
Product Launches in International Business – FY19 New range of Hair Waxes and Hair Mousse in Hobby, Turkey Vatika Afro Naturals Range in South Africa Olive Oil with Black Castor in South Africa ORS Fix-It Range in USA Vatika Serum in Egypt Amla Kids in Egypt 17
International Business – Strategic Levers - Capitalize on global Back to Nature trend Innovation - Drive innovation through range expansion - Distributor restructuring - Real-time analytics GTM - Joint Business Planning with Key Accounts - Digital Marketing - Savings initiatives Cost Management - Manufacturing efficiencies 18
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The Way Forward 6. Our Capitals 7. Annexure 19
Key Elements Driving Innovation Capability 5 1 and Renovation for Improvement Market Leadership Cost Optimisation 4 2 and Improving Regionalization Service Levels 3 GTM Strategy 20
Driving Innovation and Renovation for Market Leadership 1 (a) Focus on Core and Scalable Brands FY19 Growth % 22.4% Higher A&P Investments: 13.7% Media spends increased by 20% for Focus brands, while for the domestic business the increase was 6% 17.3% 14.9% 17.3% Increased distribution footprint 21.1% Total reach expanded to 6.7 mn from 6.4 mn outlets; Direct reach went up to 1.1 mn, increase of 8% 9.3% 9.3% Focus brands posted strong growth led by higher investments 21 Dabur Amla growth refers to the growth of Amla Franchise
Driving Innovation and Renovation for Market Leadership 1 (b) Creating Competitive Leverage Superior Claims Superior Formulation Superior Packaging Superiority over mineral oils Superiority over other Almond HO 2x stronger hair vs Other Amla HO 22
Driving Innovation and Renovation for Market Leadership 1 (c) Driving NPDs Since April 2018 23
Regionalization 2 Pilot started in North East – Growth of 12 geographical clusters 30%+ RISE Regional Insights And State-wise P&Ls RISE initiative in South underway Speed of Execution RI : Regional Insights SE : Speed of Execution (Long Term Strategic) (Quick Wins, Low Investment) • Capture Consumer, Packaging and Media Insights Trade interventions • • Use Analytics for Specific meaningful actions Activations and visibility drives • • Dive into new adjacent categories Distribution initiatives • • Regions to provide new growth opportunities Consumer promotions • 24
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