GLOBUS SPIRITS LIMITED Corporate presentation July 2013 Safe - PowerPoint PPT Presentation

GLOBUS SPIRITS LIMITED Corporate presentation July 2013

Safe Harbor This presentation contains statements that contain “forward looking statements” including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Globus Spirits’ future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Globus Spirits Limited undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances 2

India’s leading Spirits company  Successful 360º model with focus on growing consumer businesses  Consumer businesses dominate revenue mix with average share of 65%* in FY09-FY13  Pioneered IMIL branding, leader in Rajasthan, IMIL Haryana and Delhi  3 mainstream brands in young IMFL portfolio  Bottling for India’s Top 3 IMFL companies  Amongst the largest and most efficient grain- based distillery operations in India with ~90 mn 360º bulk litres operating capacity in North India model  31% CAGR (FY09-13) in revenues*; D/E of 0.2x  20 years of operational excellence, governed Bottling IMFL by prestigious board of directors  Marquee investors including Templeton Strategic Emerging Markets Fund Bulk *Proforma revenues, see annexure for details 3

Table of Contents  Indian alcobev sector on a spirited growth track  GSL, leading Spirits company  Growth strategy to be pan-India IMIL leader  Financial overview  Shareholding and Board of Directors  Annexure 4

Indian alcobev sector on a spirited growth track 15% CAGR in per-capita consumption Per capita alcohol consumption In Bulk litre 2 nd largest in the world by volumes and 3 rd largest  by value, Indian alcobev industry is estimated over 1.3 $23bn 1.2 1.1 1.0 Per-capita consumption on double-digit growth 0.8  0.7 0.6 0.6 0.5 driven by attractive demographics : Current under-penetration: one of the lowest - per-capita consumption globally 2004 2005 2006 2007 2008 2009 2010 2011 2012 Increasing per-capita income - Ample scope to grow consistently Increasing drinking age population - Per capita alcohol consumption In Bulk litre Increasing societal acceptance 11.7 11.1 10.2 - Accessibility on rise with retail modernization 9.6 8.7 - 8.2 7.3 Newer alcobev segments - 4.7 1.3 Germany France UK New USA Canada Japan China India Zealand Source: WHO 5

IMIL & IMFL growing in sync with consumer segments  IMIL and IMFL segments differentiated by consuming segments and regulations IMIL: Healthy traction in volumes IMFL: Robust double-digit growth Mn cases Mn cases 269 281 273 247 260 242 221 225 212 182 Size & Growth 157 141 CY07 CY08 CY09 CY10 CY11 CY12e CY07 CY08 CY09 CY10 CY11 CY12e Lower income, SEC D segment, Consumer Segment More affluent, SEC C+ segments ~40% of population excl BPL ~11% CAGR** for households - HPI* ~14%+ CAGR for households - HPI >10 Segment Growth between 6-10 (~SEC D) (SEC C+) Flavor dominated market, North - Whisky, East - Rum, Taste Preference varies with region South - Brandy & Rum Regulated vends Point of Purchase Regulated shops, malls, restaurants, bars Highly regulated: Distillery in state of Less restricted; Higher excise duties of Excise Control sale, excise of Rs15 per PL minimum of Rs40 per PL ~30% Alcohol Content 42.8% Rs 30 per nip Rs 45 per nip (cheap brands) Min Retail Price *Household Premium Index (HPI) :indicator of ‘Living Standard’ by Indian Readership Survey Source: Industry reports, estimates **CAGR (Q4’10 – Q4’12); 6

IMIL: Branding a game changer  Paradigm shift towards consumerism and branding from commoditized country liquor ~41% of population belongs to SEC-D and SEC-E Sizable excluding the BPL population consumer base Consumer pull for branded products providing Branding on rise stickiness to sales volumes Quota systems being gradually reduced Evolving market Distribution systems being opened up structure Move towards quality grain-based IMIL Move from illicit, Health-conscious consumers with increasing income toddy levels shifting from local/ illegal liquor to IMIL ~77% of consumption goes unrecorded (average Conversion from 2003-05), indicating scope for growth via underreported conversion from unreported (Source: WHO, Adult (15+) per capita consumption) 7

IMIL landscape: Growth amidst restrictions  Consumption in key states grew at an average CAGR of 11% (FY09-12) • 22 mn cases (FY13) • 20% FY09-12 CAGR • 25 mn cases (FY13) • 20% YoY FY13 • 18% FY09-12 CAGR • 17 mn cases (FY13) • 23% FY09-12 CAGR • 9% YoY FY13 • 18 mn cases (FY12) • 16% YoY FY12 • 36 mn cases (FY12) • 3 mn cases (FY13) • 5% FY09-12 CAGR • 18% YoY FY13 Moderately growing states Fast growing States IMIL banned states Dry States Source: State excise departments, as per data available

IMFL: Robust growth aided by premiumisation  IMFL led by double-digit growth in affluent population  Households with HPI>20 growing above 20% Attractive  Female drinkers on rise demographics  Indian houses move towards premium products, exit cheaper brands Premiumisation  Imported spirits are growing ~25% YoY and expected to reach 5mn cases by 2015  Increased accessibility and societal Modernized acceptance with growth of modern retail and distribution hospitality  Newer offerings such as low alcohol beers, wines, achieve success in traditionally whisky led market Newer offerings  Foreign companies expanding their portfolio  White spirits, currently ~3% of total IMFL expected to grow fastest 9

Table of Contents  Indian alcobev sector on a spirited growth track  GSL, leading Spirits company  Growth strategy to be pan-India IMIL leader  Financial overview  Shareholding and Board of Directors  Annexure 10

Leading North Indian spirits company  Established consumer spirits company in North India  IMIL Leadership in all 3 states of operations with 4 brands Combined operational capacity of 90 mn BL  Young IMFL portfolio of 3 mainstream brands  Sustained growth and leadership from 360 ° approach  Bottling tie-ups with top Indian IMFL companies, proxy play for IMFL  Bulk manufacturing provides strong base to support future consumer growth  Stable off-take from manufacturing leads to high utilizations and quick ramp-up of new capacity  New plants added in FY13 already at ~85% utilization  Manufacturing base in Rajasthan and Haryana  2 distilleries in Haryana and 1 in Rajasthan with combined operational capacity of 90 mn BL. 11

Evolved from ‘bulk’ to unique ‘ 360 º’ business model 2013 One of India’s largest grain-based distillery operations  Focus on building premium and profitable IMFL portfolio  Entry into attractive East India market with Bihar  Tie-up in Maharashtra for IMIL  2012 2010-11 Merged with ADL 2009 Launched Tie-up with Nimboo under 2008 Jagatjit for IMIL Launched bottling 2000 Tie-up with USL Hannibal Launched for bottling Started bottling Legendary in 1996-99 Country Club for ABD India the rum Operating in the whisky Commenced segment 1994-95 capacity up by Entered the segment bottling at 42.2mn BL Delhi IMIL market Set-up 2 nd plant Samalkha and in Behror and entered Launched first Set-up India’s entered Haryana’s IMIL IMFL brand first grain Rajasthan IMIL market based distillery market in Samalkha (Haryana) 12

Revenue mix dominated by consumer business  Average revenue share of 65% in last five years Proforma Revenue* Break-up  Consumer business consists of 3 Revenues in Rs Million 4,944 mainstream IMFL brands and 4 market- 4,697 leading IMIL brands 3,419 31% 45% 2,334 30%  26% CAGR achieved in Consumer 1,663 31% revenues over FY09-FY13 35% 55% 65% 69% 70% 69% Decline in consumer revenues in FY13 - due to rationalization of IMFL brand FY09 FY10 FY11 FY12 FY13 Consumer Manufacturing portfolio and transient de-growth in Haryana Operating Capacity (Bulk)  Bulk gains larger share in FY13 with Million Bulk LItres 86.5 addition of bulk capacity 66.4  Bulk capacity expanded rapidly in last 3 43.2 years to support consumer business 28.8 28.8 FY09 FY10 FY11 FY12 FY13 *Proforma revenues calculated by subtracting ABD franchisee revenues from net sales. Please refer annexure for details 13