Financial Analysts & Institutional Investors Meet 24 th August 2017 1
Disclaimers 1. This presentation may contain statements which reflect Management’s current views and estimates and could be construed as forward looking statements. The future involves uncertainties and risks that could cause actual results to differ materially from the current views being expressed. Potential uncertainties and risks include factors such as general economic conditions, commodities and currency fluctuations, competitive product and pricing pressures, industrial relations and regulatory developments. 2. Real Internal Growth (RIG) and Organic Growth (OG) are basis Nestlé Internal Reporting Standards. 3. Figures are regrouped / reclassified to make them comparable. 4. Calculations are based on non-rounded figures. 5. ‘Analytical data’ are best estimates to facilitate understanding of business and NOT meant to reconcile reported figures. 6. Answers may be given to non-price sensitive questions. Slide 2 2
Building for the next 100 years (15:30 hrs): Suresh Narayanan Financial Highlights (16:15 hrs): Shobinder Duggal Floor for Q&A (16:45 – 17:30 hrs) 3
Building for Where we Key Where we are Key takeaways Our GST are - headed - takeaways from last journey Growth Continuity today time Story Story 4
Priority on growth across the portfolio Strong commitment to NHW Key role of penetration, frequency and insight led innovation from last time Tapping into the many India’s within India – the emerging channels and consumer trends Responsive, committed to society, nimble footed and proud to be Nestlé 5
Our GST Journey 6
Prepare Day 3 Day 1 3500 suppliers, All Distributors 1600 distributors successfully Practice Sales and migrated to Billing started start sales by 3 rd July. Engaged with awareness programs across India. Partner Start has been fairly good, operating issues will get resolved over time 7
Actions Opportunities Commensurate Recalibrating benefits passed distribution on to the infrastructure consumers Categories -Dairy Unleashing better Whitener, Sauces, economic Infant Cereals opportunities Level playing field to make us more competitive 8
Business Scenario – Post GST Impact Outlook June growth was Expect registered negatively sales to be lower impacted by softer (excise duty trading subsumed in GST) 9
Where We Are 10
Our Mantra: Drive Volumes and Sustain Profitability • Double digit growth (volume driven) • Consumer Insight led • Launch new products in each category • Process reduction of 30- • Fast, Focused, Flexible in 40% thought and action • Reduction in meetings by • Embrace powerful ways of 50% working • Zero tolerance for non • Enable, empower, engage, compliance energize our colleagues 11
Where We Are Nearly Approximately Close to a another half of the quarter of quarter of the growth came the growth growth came from non- came from from new noodles noodles product portfolio portfolio launches Encouraging responses to An energized Secular our new MAGGI growth across product Noodles categories innovation business and renovation Based on the figures for the period April – June 2017 12
Brand Strength & Market Position Leadership Position In 5 Out Of 9 Categories YTD MAT Nestlé’s Category Brand (Jan-Jun 2017) (Jul’16-June’17) Position Instant Noodles 59.5 58.7 1 Ketchups & Sauces 24.3 24.4 2 Instant Pasta 65.2 61.4 1 Infant Formula 40.5 40.9 2 Infant Cereals 96.5 96.4 1 Tea Creamer 45.4 45.7 1 Chocolates 14.6 14.5 2 White & Wafers 62.6 62.5 1 Instant Coffee 47.3 47.2 2 Source: AC Nielsen 13
Some Of Our New Launches 14
New Product Launches: Charting a new Course * Jan ‘16- May ‘17 Population Share of Expenditure Nestlé India No. of innovations & NPD Portfolio Renovations* 4% Value Up 14 16% Global 51m 27% Seeking / Mainstream 22 12% Striving 153m 32% 7 Aspiring 41% PPP 524m 26% 43% Deprived 550m 15
Wholesome proposition Putting NUTRITION at the With the benefit of an targeting the breakfast occasion heart of what we do essential nutrient Protein for Goodness performance of fibre & Sustained Loaded with energy veggies 16
Fortified Milk 17
Unique Consumer Centric Initiatives 18
Unique Consumer Centric Initiatives 19
Where we are headed 20
Continuity Of Strategy Growth With Sustained Profitability Volume led growth Increased penetration and saliency Innovation and Renovation across brands Specific initiatives on channel / alternate business opportunities Need for continued investments to grow portfolio 21
Enhancing quality of life and contributing to a healthier future for individuals & families for our communities for the planet Enabling healthier and happier lives Helping develop thriving, resilient communities Stewarding resources for future generations Encouraging over good Creating nutrition and Reducing access to breastfeeding practices water use in water and through community Over 2 million agriculture sanitation action Over 240,000 students beneficiaries Nearly 200,000 students Safe and Creating Helping hygienic food awareness about adolescents live water healthier Nearly 2000 vendors Over 90000 students conservation Over 700 employees Over 50 trees saved Recycling waste Engaging Enhancing paper at our employees in rural offices social initiatives livelihoods Over 250,000 farmers 22
Why Fortify? 70% Iron Deficiency 65% Vitamin A Deficiency 45% Zinc Deficiency For children below the age of 5, basis national survey 2013-14 conducted by Ministry of Women and Child Development Food items are 2-5% believed to be fortified Our task - innovate to with micronutrients support national priorities Fortification the solution to micronutrient deficiency 23
Initiatives To Manage Malnutrition Via Micronutrient Fortification Fortification within products/brands Fortified Milk to hit shelves soon 24
Institutionalizing Our Learnings 25
Driven by our purpose and values Growth plus sustained profits Focus on penetration + volume to drive growth Continued efforts towards innovation and renovation Today Commitment towards relevant Nutrition Proposition / NHW Consumer centric initiatives on digital, on ground activation, route to market People initiatives to internalize change 26
Agenda 1 Key impacts of transition to Ind AS 2 Financials: January-June 2017 3 Impact of GST on Key Financials 27
Key impacts of transition to Ind AS Ind AS implemented w.e.f 1 st January 2017 Previous period figures restated to make them comparable Treatment under Treatment under Cost Line Change impact IGAAP Ind AS Excise Duty Netted from Sales Separate cost line Sales Incentives to Trade - Marketing Adv. & Sales Promotion Netted from Sales Sales - Selling Selling & Distribution Adv. & Sales Promotion Selling & Distribution Actuarial gains/losses Employee Benefits Other Comprehensive Employee benefits on retirement benefits expense Income This is not an exhaustive list 28
Impact on Key Ratios: 2016 IGAAP Ind AS Impact* (INR Bio) (INR Bio) Total Sales 91.6 94.1 270 bps Employee Benefits Expense 9.8 9.0 % Total Sales 10.8 9.6 120 bps Advertisement & Sales Promotion 5.7 5.0 90 bps % Total Sales 6.2 5.3 Selling & Distribution 4.6 4.4 30 bps % Total Sales 5.0 4.7 Profit from Operations 15.7 16.5 40 bps % Total Sales 17.2 17.6 Net Profit after Tax 9.3 10.0 50 bps % Total Sales 10.1 10.6 * Includes the denominator Impact 29
Market Dynamics H1 2017 Source : AC Nielsen Market Size 2016 FMCG 45 Bio F&B 25.2 Bio The market momentum remained attractive Processed Food (excld Commodities) 14.5 Bio Nestlé Categories 4.1 Bio Market Size in USD Bio for 2016 (1USD = INR 67.19) Note: Infant Formula and Infant Cereal Segments included in FMCG, F&B, Processed Food and Nestlé Categories 30
Highlights : January - June Amount in INR billion unless otherwise stated RIG (%) OG (%) Total Sales Profit from Operations INR -0.3 Bio INR +3.8 Bio Growth +8.2% Margin -210 bps 8.9 8.1 16.2 18.3 2.4 0.8 46.6 50.4 8.5 8.2 Total Comprehensive Income Net Profit EPS (INR) INR +0.4 Bio INR +4.42 INR +0.6 Bio Margin : No Change Growth +8.1% 7.0 20.0 7.0 20.0 6.5 6.5 11.0 11.3 15.0 15.0 11.3 10.5 6.0 6.0 5.5 10.0 5.5 10.0 5.0 5.0 5.0 5.0 5.3 5.7 4.9 5.5 54.7 59.1 4.5 4.5 4.0 - 4.0 - % of Sales H1’17 H1’16 RIG & OG % are based on Third Party Sales 31
Evolution of Quarterly results Q4 Q1 Q2 Q3 Total Sales 8.2 12.8 % YoY Growth 9.1 7.3 -7.8 16.4 34.6 15.9 INR Bio 23.6 23.0 24.1 23.3 25.7 24.7 2016 2017 Profit from Operations 17.6 16.2 % of Net Sales 19.4 17.1 16.6 17.2 17.0 15.4 INR Bio 4.6 3.9 4.0 4.0 4.4 3.8 - Percentage calculations are based on non-rounded figures. 32
Sales Performance Domestic Sales Export Sales 93 94 % Contribution 7 6 + 9.3% Value - 5.7% (INR Bio) 43.3 47.3 3.3 3.1 + 9.5% Volume + 2.4% ( 000’ Tons) RIG 8.5% 188.7 172.3 9.7 9.9 H1’16 H1’17 33
Recommend
More recommend
