INVESTOR PRESENTATION SEPTEMBER 2017
DABUR OVERVIEW One of the oldest and largest FMCG Companies in the country World’s largest in Ayurveda and natural healthcare Total reach of 6 mn outlets, one of the highest among FMCG companies Nineteen world class manufacturing facilities catering to needs of diverse markets Strong overseas presence with 30% contribution to consolidated sales 1.
STRONG FINANCIAL PROFILE In INR Bn Sales Profit After Tax (PAT) PAT PAT margin (%) 78.5 78.1 76.8 12.8 12.5 70.7 13.0 18.0% 10.7 61.5 16.0% 11.0 16.6% 9.1 15.9% 14.0% 9.0 7.6 12.0% 13.7% 12.9% 12.4% 7.0 10.0% 8.0% 5.0 6.0% 3.0 4.0% 1.0 2.0% FY13 FY14 FY15 FY16 FY17 -1.0 FY13 FY14 FY15 FY16 FY17 0.0% Operating Profit Operating Profit Operating margin (%) 20.0 25.0% 18.0 15.1 15.2 16.0 20.0% 13.2 14.0 19.8% 11.6 19.2% 12.0 15.0% 10.0 16.9% 16.3% 16.3% 10.0 8.0 10.0% 6.0 4.0 5.0% 2.0 FY16 and FY17 0.0 0.0% are basis IND AS 2. FY13 FY14 FY15 FY16 FY17
STRONG FINANCIAL PROFILE Shareholders' Funds ROIC In INR Bn 53.0% 48.5 47.9% 45.2% 43.6% 41.7 38.3% 33.5 26.6 21.0 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Earnings Per Share 7.2 7.1 In INR 6.1 5.2 4.4 FY16 and FY17 are basis IND AS 3. FY13 FY14 FY15 FY16 FY17
MANUFACTURING FACILITIES Twelve Domestic Manufacturing Locations in India Baddi, Himachal Pradesh Pantnagar, Uttaranchal Sahibabad, Uttar Pradesh Jammu, J&K Silvasa,Dadra & NagarHaveli Alwar, Rajasthan Pithampur, Madhya Pradesh Katni, Madhya Pradesh Narendrapur,West Bengal Tezpur, Assam Newai, Rajasthan Nasik, Maharashtra Seven International Manufacturing Locations Sri Bangla UAE Egypt Nigeria Turkey Nepal Lanka desh 4.
TEZPUR PLANT • New manufacturing facility commissioned in Tezpur, Assam in March’17. • Investment of Rs 250 Crore • Largest production facility for Dabur across the globe • Will manufacture entire range of Dabur's Ayurvedic Medicines, Health Supplements, Hair Oils, Shampoos, Toothpastes, Skin Care and Home Care products • Spread over 30 acres of land, this factory features fully automated processing lines and automated packing lines to optimize supply chain and quality management with special focus on environment and sustainability 5.
DISTRIBUTION NETWORK URBAN RURAL Factory Factory C&F C&F GT Stockist Insti Stockist MT Stockist Super Sockist Wholesaler Sub Sockist Retailer Retailer Retailer Consumer Consumer Consumer Consumer Distribution reach of 6 mn retail outlets; Cover over 45000 villages directly 6.
DISTRIBUTION INITIATIVES Focus on enhancing field efficiencies • Inducted around 1000 Village salesmen on company rolls • Increase the outlet coverage per SSM Increasing Direct Reach • Near term target to increase direct reach to 1 mn outlets Product Focus • Rural Focused Product Mix • Innovative launches in Urban Capability enhancement through training and IT enablement Focus on alternative channels- Increased role of Modern Trade, Cash & Carry and E Commerce 7.
WHAT IS AYURVEDA? “ Ayurveda is the traditional system of healthcare which promotes PREVENTION and CURE • Ayurveda is based upon Natural Remedies which incorporate the healing properties of plants and herbs. • It is a holistic system which heals by activating the natural inherent curative force of the body 8.
DABUR & AYURVEDA Dabur has created the Ayurveda eco system over many decades involving R&D, medical fraternity, hospitals, patients along with manufacturing and selling the entire product range of Classical Ayurveda 9.
CLAIM BASED COMMUNICATION Double immunity 2X faster physical growth Clinically proven formula Clinically proven formula Stay fit, feel young Dabur focuses on evidence based claims for its products 10.
PROMOTING AYURVEDA: DOCTOR REACH Directly reaching • Detailing and Product 32000+ sampling Connecting Engaging Doctors Collaborating Promoting Association with 50 + Ayurvedic Colleges Key Opnion www.dabur Leaders mediclub.com 11.
DABUR BUSINESS STRUCTURE Dabur India Ltd. International Domestic (70%) (30%) Organic Acquired Domestic Others (4%) (69%) (31%) FMCG (66%) * Others include Retail, Commodity exports etc Note: % figure in brackets indicate % share in Consolidated Sales for FY17 12.
INDIA BUSINESS 13.
SALES BY BUSINESS VERTICAL Domestic FMCG* Healthcare HPC Foods (31%) (50%) (19%) Health Supplements 17% Foods Skin & Salon 19% Digestives 5% 5% Domestic FMCG* OTC& Business Breakdown Home Care Ethicals 7% 9% Oral Care Hair Care 16% 22% * Breakdown of Domestic FMCG business basis FY17 Sales 14.
MARKET LEADER IN 6 CATEGORIES Leading position in key categories across verticals #Relative Competitive Position #1 #1 #2 #3 #2 #1 #2 #1 #1 #2 #1 Foods Healthcare Home and Personal Care * Position basis Nielsen Market Share data MAT Mar’17 15.
BUSINESS STRATEGY Healthcare • Leadership in Ayurveda – scientific evidence & research • OTC portfolio to be scaled up through innovation & awareness creation • Doctor advocacy through Medico Marketing channel Home & Personal Care • Ayurvedic / Herbal focus • Premiumization & Differentiation • Strong innovation agenda Foods • Maintain leadership in Juices & Nectars category • Leveraging the Fruit equity associated with the ‘Real’ brand • Focus on ‘Healthy’ range of products 16.
17. FOCUS ON INNOVATIONS
18. 16 brands with turnover of INR 1bn+ with 3 brands over 10bn CONTINUE TO BUILD BIGGER BRANDS
MOST TRUSTED BRANDS • Dabur Red Paste and Dabur Hajmola – have been ranked amongst the biggest gainers in the latest Brand Equity Most Trusted Brands List • Dabur Red Paste moved up 66 places and was ranked 34 in the Brand Equity Most Trusted Brands 2016 list, released by The Economic Times, up from its ranking of 100 in the previous year • In the Oral Care category list, Dabur Red Paste took the third place , a gain of one rank from the previous year. The year 2016 had seen Dabur Red Paste also break into the Top 3 in the market, becoming the third largest toothpaste brand in the country. • Hajmola gained 38 places and was ranked 85 in the list. The brand was also ranked in the Top 5 in the OTC category for 2016 19.
INTERNATIONAL BUSINESS 20.
BUSINESS OVERVIEW In INR Mn 24520 24226 23108 23199 18338 FY16 and FY17 are basis IND AS FY13 FY14 FY15 FY16 FY17 Regionwise Sales:FY 2016-17 • Saudi Arabia, UAE Middle East • Egypt, Nigeria, Kenya, South Africa Americas Africa 17% Middle East • Turkey, UK Europe Europe 31% 13% • Nepal, Bangladesh, Pakistan Asia Asia Africa 19% 20% • USA America 21.
THE JOURNEY… 2015-2018 2011-2014 2007-10 2003-2006 • Enter into African Markets • Hobi and Namaste • Expand portfolio acquired which led to • Cross pollinate • Entry into Personal geographic expansion ideas and leanings • Innovative product Care segments from different units offerings • Manufacturing 2002 • Management locations expanded • Franchisee bought • Systems and bandwidth expanded out and renamed processes Dabur International implemented • Portfolio expansion beyond Hair Oils • Focus on building • Trading Model demand through a franchisee • Hair Oil was mainstay • No localization 22.
ORGANIC INTERNATIONAL BUSINESS Others Others Oral Care 5% Skincare 5% 2% 8% Hair Oil Oral Care 37% 12% Hamamzaith & Styling 12% Hair Oil Hair Cream Shampoo 93% 12% 14% The Organic International Business has evolved from being just a Hair Oil business to a diversified personal care entity 23.
24. RECENT INNOVATIONS - IBD
IBD : BUSINESS STRATEGY Capitalize on the “Herbal Wave” trend Focus on Core Categories like Hair Care, Oral Care and Skin Care Leveraging Digital platform to enhance consumer awareness and brand visibility Optimize Advertising spends and capture better efficiencies Continued focus on brand innovation and renovation 25.
CONSOLIDATED PERFORMANCE : FY17 In INR Mn Sales PAT 12770 78507 12511 76801 FY16 FY17 FY16 FY17 • Sales for FY17 declined by 2.2% and stood at Rs.76.8 bn. However, Sales were flattish in constant currency terms • PAT increased by 2.1% and stood at Rs.12.77 bn. • Operating margin increased from 19.3% in FY16 to 19.6% in FY17 • Domestic business was impacted because of trade disruption and pipeline correction during demonetisation • International business faced headwinds because of geo political disturbance in the Middle East and currency volatility in Egypt, Nigeria and Turkey 26.
GST IMPACT • Netting of GST from sales will reduce topline by around 5% • No material impact on bottomline as net effect of GST is more or less neutral • GST roll off has been smooth with all direct channel partners coming on board • Wholesale trade yet to come back to normalcy; however other channels such as Cash & Carry, Modern Trade, E commerce and Super-Sub networks have picked up • Trade de-stocking preceding the GST implementation hurt sales in Q1FY18 • However longer term GST should be positive for the sector with increasing compliance and streamlining of logistics and supply chain. 27.
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