VADILAL INDUSTRIES Corporate Presentation
Disclaimer Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, like regulatory changes, local political or economic developments, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. Vadilal Industries will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward looking statements to reflect subsequent events or circumstances. 2 \ 21
Table of Contents 3 \ 21
Vadilal Industries Overview
Overview • Currently managed by fourth generation promoter family 108-year old, established •Selected India’s most trusted ice cream brand in 2013 and 2014 by the ice cream brand Brand Trust Report • Top 3 ice-cream brand in the country , 150+ flavors Largest range of ice creams of •300 SKU’s of cones, candies, bars, ice lollies, cups, family packs, economy any company in India packs Second largest ice cream • Leadership in Gujarat, Rajasthan, UP, Uttarakhand, Haryana and manufacturer in India by volume Chandigarh Strong distribution network in •16 states, 50 CNF’s, over 800 distributors, 250 distribution vehicles, 55,000 North, West and East India retail outlets Expanding global business • Products reach 45 countries across four continents presence • 80% contribution from exports in processed foods segment 5 \ 21
Indian Ice Cream Market Evolving perceptions • Ice cream is transitioning from periphery to mainstream, from occasional indulgence to snacking option Changing demand patterns • Transition from seasonal to year-long consumption Growing affordability • Increased disposable incomes and discretionary spending driving secular demand growth Premiumization trends • Consumers receptive to spending on high quality products that meet their rising aspirations Innovative product development • Shift from limited portfolios of traditional products to innovative, global-standard offerings Expanding customer choices • Local brands competing with international players, leading to market expansion Significant headroom for growth • India’s current annual per capita consumption of 400 ml vs 2.3 liters world average, Chinese consumption is 20X India’s Nationwide retail expansion • Rapid expansion of retail network leading to product availability and convenience 6 \ 21
Vadilal: Growth Strategies Retail Investments New Product Development Brand Building • 5,000 new sales Initiatives Geographical outlets planned in • Constantly innovating FY16 Expansion to roll out new • 50 new branded ice • products in ice cream Seen as one of the cream parlors and 50 segment most trusted ice more distributors • cream and leading Expanding footprint • Targeting expansion expected to be added food brand in India in North and East of market share in in FY16 regions of India • premium/super- Undertaken • Investments in new premium segment • campaigns to New production technologies strengthen social facility expected in media presence East India • • Rural marketing Expanding initiatives distribution footprint in tier 3/4 cities and rural markets 7 \ 21
Ice Creams - Brands Portfolio 8 \ 21
Distribution Presence Himachal Jammu & Pradesh Kashmir Chandigarh Bihar Punjab Uttaranchal Delhi Haryana Uttar Pradesh Bareilly Rajasthan West Madhya Pradesh Bengal Pundhra Jharkhand Dharampur Gujarat Chhattisgarh Orissa Distribution network comprises of 55,000 retailers, over 800 distributors, 50 CNFs, 250 distribution vehicles and almost 300 SKUs. Adopted the franchisee route to further increase market penetration and established 250 ice cream parlors under ‘ HAPPINEZZ ’ brand name Access to the largest fleet of refrigerated vehicles in India, backed by an Production Facilities expanding distribution network 9 \ 21
Production Facilities • Capacity expanded across production facilities over the last three years, • Current production on automated processes “untouched by hand”, manual intervention only at packaging stage • Discontinuing production of non-branded canned pulp products to focus on branded portfolio • No further capital expenditure anticipated on capacity enhancement over the next three years Facilities Capacity Production Certification Bareilly 175,000 liters per Ice cream ISO-22000:2005 day Dharampur 33,000 kgs per day Processed foods ISO-22000:2005 and BRC : Issue 6 Pundhra 175,000 liters per Ice cream ISO-22000:2005 day and BRC : Issue 6 10 \ 21
Processed Foods Business • Global business selling to 45 countries in four continents • Strong distribution to Indian diaspora, being further developed with new product launches • Expanded export markets from 12 SKU’s supplied to seven countries in 1991 to 100+ SKU’s to 45 countries currently • Expanded domestic market from 18 SKU’s sold in Gujarat in 2000 to 75+ SKU’s available in five Indian states currently – Vadilal Quick Treat brand has expanded presence to Maharashtra/Mumbai • Aggressively expanding frozen food line, exited from low margin, mango pulp business 11 \ 21
Processed Foods - Brands Portfolio • Processed foods products are marketed under the brand name ‘Quick Treat’ • Portfolio includes frozen vegetables, ready-to-eat/ready-to-serve frozen snacks, Indian breads and curries • Positioned to assist Indian kitchens with traditional home cooking 12 \ 21
Awards and Accreditations 13 \ 21
Financials Performance Trends
Financials Performance Trends Revenue 416.0 371.7 354.7 330.1 325.5 285.8 236.5 FY11 FY12 FY13 FY14 FY15 9M FY15 9M FY16 Ice Cream Processed Foods 198.8 236.0 265.5 294.0 341.7 279.3 315.2 73.9 65.8 60.2 48.6 48.1 39.8 38.9 FY11 FY12 FY13 FY14 FY15 9M 9M FY11 FY12 FY13 FY14 FY15 9M 9M FY15 FY16 FY15 FY16 Consolidated financials in Rs. Cr 9M financial numbers are standalone 15 \ 21
Financials Performance Trends EBITDA 51.9 60 36.8 40.5 39.1 42.0 34.6 50 Over the last three years, consumer behavior has 40 remained largely subdued. In this period, VIL has 25.1 30 delivered about 14% growth from its expanded 20 10 manufacturing capacities. 0 FY11 FY12 FY13 FY14 FY15 9M FY15 9M FY16 The Company has also made substantial investments in adopting technology across various aspects of the business. This includes automating manufacturing processes, food safety standards and enhancing the PAT supply chain. 17.5 20 15 Margins have remained subdued as a consequence. 10 6.3 6.0 These investments are now expected to fructify into 5.1 4.2 5 1.9 1.4 improving financial performance. 0 FY11 FY12 FY13 FY14 FY15 9M FY15 9M FY16 Consolidated financials in Rs. Cr 9M financial numbers are standalone 16 \ 21
Financials Performance Trends - (Balance Sheet) Networth Net Fixed Assets 115.3 115.1 115.1 231.2 224.9 111.2 221.4 203.5 114.6 43.5 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Non Current Liabilities Net Current Assets 117.1 115.5 114.3 103.2 91.9 21.9 20.8 11.1 (6.6) (0.6) FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Consolidated financials in Rs. Cr 17 \ 21
Outlook
Planned Initiatives Corporate Transition Expanding Presence Increasing penetration into 24 states Presence across 16 states, 50 CNF’s, Discontinuation of non-branded/ Planned merger of Vadilal Industries in India – moving from passive to over 800 distributors, 250 bulk processed foods to aid debt (manufacturing entity) and Vadilal aggressive business strategy to distribution vehicles, 55,000 retail reduction Enterprises (distribution entity) derive benefit from improving outlets consumer behavior Product Strategies Supply Chain Initiatives Focus on higher value products and Sales & Marketing push – Aggressive expansion of sales Augmenting distribution margin expansion – targeting 5% accelerating new product generating assets/cold supply chain – management system that will allow pricing improvement in the backdrop development and increasing spend annual planned addition of 5,000+ micro-control over ROI from each of weak cost of inputs and on promotional activities deep freezers business area and point of sale unit distribution Rs. 175 crore has been invested over last three years to expand capacity and related infrastructure, currently planned initiatives will further leverage this investment 19 \ 21
Contact Us 20 \ 21
THANK YOU 2/24/2016 21
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