111 " Pidilite 7 th June, 2019 The Secretary The Secretary BSE - - PDF document

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111 " Pidilite 7 th June, 2019 The Secretary The Secretary BSE - - PDF document

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,40 01 " 111 " Pidilite 7 th June, 2019 The Secretary The Secretary BSE Ltd. National Stock Exchange of India Ltd. Corporate Relationship Dept.. Exchange Plaza, Plot no. C/1, G Block, Bandra-Kurla Complex, 14 th floor. P. J. Tower, Dalal

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,40

01"

111"

Pidilite

7th

June, 2019 The Secretary The Secretary BSE Ltd. National Stock Exchange of India Ltd. Corporate Relationship Dept.. Exchange Plaza, Plot no. C/1, G Block, 14th

  • floor. P. J. Tower,

Bandra-Kurla Complex, Dalal Street, Fort Bandra (E). Mumbai - 400 001 Mumbai - 400 051 Stock Code — 500331 Stock Code - PIDILITIND Sub: Investor Presentation Dear Sir. Please find attached Investor Presentation. Thanking You, Yours faithfully, For Pidilite Industries Limited Puneet Bansal Company Secretary Encl: as above

Rev]. Office Regent Chambers, 7th Floor Jamnalal Bajaj Marg 208 Nariman Point Mumbai 400 021 Pidilite Industries Limited Corporate Office Ramkrishna Mandir Road Andheri - E, Mumbai 400059, India

T + 91 22 2835 7000

2835 7952 / 2835 7365 F + 91 22 2830 4482 www.pidilite.com CIN:L24100MH1969PLC014336

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Investor Presentation

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Disclaimer

This presentation may contain statements which reflect the management’s current views and estimates and could be construed as forward looking statements. The future involves certain risks and uncertainties that could cause actual results to differ materially from the current views being expressed. Potential risks and uncertainties include such factors as general economic conditions, foreign exchange fluctuations, competitive product and pricing pressures and regulatory developments.

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Agenda

  • Company Overview
  • Business Overview
  • Macro Indicators
  • Strategic Direction
  • Key Consideration
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Company Overview

Since 1959

  • No. 1 Adhesives

company in India 23 Mfg. Plants & 23 Co Makers in India >5300 permanent employees Operations in 9 countries 10 Year EBITDA CAGR 20% >500 Products Exporting to >80 countries >INR 60,000 Crore Market Cap

  • Rs. 19.3 EPS for

the FY 2018-19 3 R&D Centers 19 International & 9 Domestic Subsidiaries 10 Year Net Sales CAGR 13% India’s Super 50 Company 10 Years Market Cap CAGR 40%

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Sustainable Strong Growth …

Net Sales Growth Trend Over Last 10 Years EBITDA Growth Trend Over Last 10 Years

2,286 6,770 13,762 12% 16% 20% 10% 12% 14% 16% 18% 20% 22% 24% 26% 28%

  • 2,000

4,000 6,000 8,000 10,000 12,000 14,000 16,000 2008-09 2013-14 2018-19 Consolidated EBITDA (Rs Millions)** EBITDA as a % to Net Sales 19,863 42,606 70,348

  • 10,000

20,000 30,000 40,000 50,000 60,000 70,000 80,000 2008-09 2013-14 2018-19 Consolidated Net Sales (Rs Millions)* **EBITDA before Non Operating Income *Sales net of excise duty

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FY 19 Net Sales & EBITDA

13,449 13,762 11,000 12,000 13,000 14,000 15,000 FY 2017-18 FY 2018-19 Consolidated EBITDA (Rs Millions)* 60,324 70,348 50,000 55,000 60,000 65,000 70,000 75,000 80,000 FY 2017-18 FY 2018-19 Consolidated Net Sales (Rs Millions)**

**Sales net of excise duty

On a comparable basis after reflecting accounting impact of GST, net sales grew by 17.5% (excluding sales of Cyclo division of Pidilite USA Inc., which was sold by Pidilite USA

  • Inc. in June 2017).

Margins have been impacted by high input costs and a weaker rupee. While pricing actions have been taken, the input costs and the exchange rate have both now eased from their peak.

*EBITDA before Non Operating Income

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21,374 1,56,561 6,31,087

  • 1,00,000

2,00,000 3,00,000 4,00,000 5,00,000 6,00,000 7,00,000 2008-09 2013-14 2018-19 Market Cap (Rs Millions)

Creating Values for Shareholders

Market Cap growing @ 40% CAGR / Steady dividend payout

1,789 2,561 2,931 3,667 3,980 34.4 33.1 33.8 38.4 40.6 32.0 34.0 36.0 38.0 40.0 42.0 44.0 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 FY15 FY16 FY17 FY18 FY19 Dividend Payout (Rs Millions) % to Net Profit (excluding exceptional items)

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Agenda

  • Company Overview
  • Business Overview
  • Macro Indicators
  • Strategic Direction
  • Key Consideration
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Our Businesses

Woodworking, Wall and Wood Finishes Construction Chemicals Consumer Products – Maintenance and Arts, Stationery, Fabric Industrial Business Consumer & Bazaar

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Our Businesses: Revenue Split

C&B 84% IP 15%

Construction& Paint Chemicals {20%} Adhesives & Sealants {56%} Art & Craft Materials etc. {8%} Industrial Adhesives {4%} Pigments & Preparations {6%} Industrial Resins etc. {5%} Others {1%} C&B – Consumer & Bazaar, IP – Industrial Products Standalone Results – % of Total Sales for 2018-19

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C&B Businesses

84%

Of Company’s Revenue

Adhesives & Sealants : 56% Paint Chemicals : 20% Art & Craft Materials etc. : 8%

Market Leader

in all segments of adhesives and sealants, construction chemicals (retail segment) and hobby colors

Strong Brands Extensive Distribution

Direct Coverage : 1.5 Lacs + Dealers In-direct Coverage : 50 Lacs + Dealers

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Industrial Businesses

15%

Of Company’s Revenue

Industrial Adhesives : 4% Industrial Resins etc. : 5% Pigments & Preparations : 6%

Market Leader

in pigment dispersions for Indian textile segments

Pioneer

in manufacturing Pigment Violet 23 in India Industrial Products:

  • Specialty polymers and co-polymers
  • Hot melt adhesives
  • Adhesives for Footwear, Leather
  • Organic & high-performance Pigments
  • Epoxy & Cyanoacrylates for Automotive assembly
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Global Footprint

INR 6,068 mn

Export Revenue FY’19

80+ Countries

Export to..

19

Overseas Subsidiaries 6 direct, 13 step down Total Revenue from Overseas subsidiaries of Rs. 5,233 mn in FY’19 International manufacturing activities in:

  • USA
  • Brazil
  • Thailand
  • Bangladesh
  • Egypt
  • Dubai
  • Sri Lanka
  • Singapore

Specific focus on growing business in Bangladesh and Sri Lanka New manufacturing facilities planned in Ethiopia An additional manufacturing facility planned in Bangladesh is expected to commence production in Q2 FY’19

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Global Footprint : Int’l Subsidiaries

North America SAARC / SEA

  • Sargent Arts is a leading supplier of quality art materials

to the educational and retail markets throughout the United States.

  • Adult colouring segment has seen slow-down in current

Year.

  • Bangladesh: No. 1 player manufacturing adhesives,
  • sealants. Growing & profitable business, and in the

process of expanding manufacturing capacity.

  • Sri-Lanka: Acquired from CIC Holdings PLC, Chemifix

trademark and other brands associated with PVAC adhesives business in 2015.

  • SEA: Construction chemical subsidiary in Thailand.

MEA

  • Egypt: Manufactures & sells adhesives, sealants & other
  • products. Decline in sales growth due to market

conditions.

  • Dubai: Modern purpose built factory at Dubai

Investment Park II. The facility manufactures and supports a range of construction chemicals.

  • Africa has numerous similarities with India - trade (small

retail setups), application (No DIY concept). Most of the dealers in Africa are of Indian origin.

South America

  • The business manufactures and sells Adhesives, Sealants

and Construction Chemicals.

  • Has been facing competitive pressure in key products.
  • Focus on new and fast moving products for improving

margin.

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We continue to deliver value through high quality customer connect.

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Regular Recognition

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Agenda

  • Company Overview
  • Business Overview
  • Macro Indicators
  • Strategic Direction
  • Key Consideration
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Macro indicators provide strong impetus..

220 290 340 590 100 200 300 400 500 600 1991 2001 2008 2030 26% 28% 30% 40%

Urbanization Rate

Urban Population (M)

Note: Urban (GOI definition): 4,000 People/75% of men in non agricultural work/Population density of 400 per sqkm Source: MGI, Secondary Research, Monitor Analysis

GDP GROWTH STORY INTACT BY 2030, 40% OF INDIA WILL LIVE IN CITIES ……OPPORTUNITY IN TIER 2 & TIER 3 STATES …AND IN ASPIRERS/BOTP CONSUMER SEGMENTS

Source : Reserve bank of India (www.rbi.org.in)

5.6% 6.3% 7.0% 7.7% 8.2% 7.1% 6.6% 5.8% 5.0% 6.0% 7.0% 8.0% 9.0% Q1 FY 17-18 Q2 FY 17-18 Q3 FY 17-18 Q4 FY 17-18 Q1 FY 18-19 Q2 FY 18-19 Q3 FY 18-19 Q4 FY 18-19

GDP Growth (%)

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Agenda

  • Company Overview
  • Business Overview
  • Macro Indicators
  • Strategic Direction
  • Key Consideration
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How we view our portfolio

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How we grow our core at 1-2X of GDP

  • 2. INNOVATE
  • 3. PREMIUMIZE
  • 1. DRIVE PENETRATION

CORE

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How we grow our core at 1-2X of GDP CORE

  • 1. DRIVE PENETRATION

Exhaustive immersions to collect insights Identify usage patterns and accordingly select target segments Focused media strategy to reach target segment and deliver growth

Driving Penetration Through

Usage Target Segments Reach & Availability

Nongriat Village, Meghalaya

Case Study: Fevikwik

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How we grow our core at 1-2X of GDP

  • 2. INNOVATE

Last Minute Finishing Reach Odd Spaces Ease of Use

Fast Grab & Rapid Bonding Excellent Heat Resistance Application Control Case Study: Fevicol Ezeespray

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How we grow our core at 1-2X of GDP

  • 3. PREMIUMIZE

Case Study: Evolution of Fevicol

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How growth businesses grow at 2-4X of GDP CORE

  • 2. WHOLISTIC BRAND MANAGEMENT
  • 1. CREATE CATEGORIES

GROWTH

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How growth businesses grow at 2-4X of GDP

  • 1. CREATE CATEGORIES

Few examples..

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How growth businesses grow at 2-4X of GDP

  • 2. WHOLISTIC BRAND MANAGEMENT

Dr.Fixit will prevent leakage from happening Dr.Fixit will prevent leakage from happening

Driving need of waterproofing Driving need of waterproofing by showing consequences of not doing it

Visual way of showing consequence of not Waterproofing Visual way of showing consequence of not Waterproofing Verbal way of showing consequence of not Waterproofing Verbal way of showing consequence of not Waterproofing Right Waterproofing is waterproofing before painting Right Waterproofing is waterproofing before painting Right Waterproofing is using right quantity of LW+ Right Waterproofing is using right quantity of LW+ Right Waterproofing is application on 5 surfaces Right Waterproofing is application on 5 surfaces

Communicating importance of right waterproofing

Messaging

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Our Pioneer Categories CORE GROWTH

Largest player in specialized floor coatings Acquisition for establishing place in resin flooring and floor coatings market. Technical collaboration aimed at providing a comprehensive range of Thermoplastic Hot Melt adhesives for catering to the requirements of joineries and industrial consumers. Range of premium wood finishes Engaging in high technology wood finish business in India and other select countries

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Organisation-wide Cross-cutting Themes

  • 2. GOING DIGITAL
  • 3. CULTURE AS A COMPETITIVE EDGE
  • 1. SALES & DISTRIBUTION EXCELLENCE

CROSS-CUTTING THEMES

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Organisation-wide Cross-cutting Themes

  • 1. SALES & DISTRIBUTION EXCELLENCE
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Organisation-wide Cross-cutting Themes

  • 1. SALES & DISTRIBUTION EXCELLENCE
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Organisation-wide Cross-cutting Themes

  • 2. GOING DIGITAL..

Leveraging potential of data, predictive and prescriptive analytics to transform Ways of Working

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Organisation-wide Cross-cutting Themes

  • 3. CULTURE AS A COMPETITIVE EDGE

Youthful

Idea Meritocracy

Celebration

Communication

Action- Oriented

ro-eneurial Culture which is

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Agenda

  • Company Overview
  • Business Overview
  • Macro Indicators
  • Strategic Direction
  • Key Consideration
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Key Consideration

  • High market share and strong position in most products and categories
  • Strong portfolio of trusted brands
  • High mix of sale from products / categories pioneered by Pidilite in India
  • Track record of consistent growth in Sales and Profits
  • Enough headroom to grow domestic business in India
  • Robust cash flow and attractive Return on Capital Employed
  • Strong Balance Sheet with zero debt obligations
  • Consistent dividend pay-out over the years
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Questions?

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Thank You

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Investor Contact

  • Mr. Puneet Bansal, Company Secretary

Ramkrishna Mandir Road, Off Mathuradas Vasanji Road, Andheri (E), Mumbai - 400 059. Phone : +91 22 2835 7949 Fax : +91 22 28216007

Investor Relations - investor.relations@pidilite.co.in CIN : L24100MH1969PLC014336