CORPORATE PRESENTATION SEPTEMBER 2015 SAFE HARBOR This - - PowerPoint PPT Presentation

GLOBUS SPIRITS LIMITED

SEPTEMBER 2015

CORPORATE PRESENTATION

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

• f 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

LEADING SPIRITS COMPANY IN NORTH INDIA

3

• Pioneered IMIL branding, leading player in

Rajasthan, Haryana and Delhi

• Young IMFL portfolio of 3 mainstream brands

Established consumer business in North India

Unique e 360⁰ model l straddli dling g the entire re alcohol l valu lue e chain

• Bottling for India’s Top 3 IMFL companies
• Amongst the largest and most efficient grain-

based distillery operations in India with ~90 mn bulk litres capacity

Large, efficient manufacturing operations

• 13% CAGR (FY11-15) in revenues; D/E of 0.35x
• 20 years of operational excellence, delivering

CAGR of 20% in operating capacity in last 5 years

Sustained performance led by strong growth in Rajasthan

Bulk Bottling IMFL IMIL

360 360º model

Bulk Bottling IMFL IMIL

Listed on Indian Stock Exchanges (BSE, NSE)

TABLE OF CONTENTS

• Indian Alcobev Sector – A High Potential, High Growth Market
• GSL, leading Spirits company
• Growth strategy to be pan-India 360⁰ player
• Financial overview
• Shareholding and Board of Directors
• Annexure

4

Source: WHO, as per latest year available

Ample e Scope e to Grow Con Consis istentl tly

Per capita (15+ years) alcohol consumption In Bulk litre (2011)

14% CAGR in Per-capita a Con Consum umption

Per capita (15+ years) alcohol consumption In Bulk litre

INDIAN ALCOBEV – AN ATTRACTIVE MARKET

• 2nd largest in the world by volumes, preceded only by China
• 3rd largest by value, Indian alcobev industry is estimated over $23bn
• Per-capita consumption of double-digit growth driven by attractive demographics

1.5 1.8 2.2 2.5 2.6

2007 2008 2009 2010 2011

11.2 10.3 8.6 7.3 6.0 4.5 2.6

Russia UK USA Brazil Thailand World India

IMIL 31% IMFL 38% OTHERS 31%

Source: International Wine & Spirits Research (IWSR), Industry reports, Globus estimates

THREE MAIN SEGMENTS

In beverage alcohol, IMFL is the largest segment followed by Beer & IMIL. Spirits industry comprises IMFL and IMIL.

Beverage Alcohol Split in 2013

Mos

• stly

y bee beer r – 251mn mn cases es and Wine e – 2.4mn n cases es 249mn cases es 311mn n cases es

IMIL & IMFL: DIFFERENT SPIRITS MARKETS

Lower income, SEC D,E segment, ~40% of population excl BPL Consum umer r Segment More affluent, SEC C+ segments ~11% CAGR** for households - HPI* between 6-10 (~SEC D) Segment Gro rowth ~14%+ CAGR for households - HPI >10 (SEC C+) Flavor dominated market, varies with region Taste e Prefere renc nce North - Whisky, East - Rum, South - Brandy & Rum Regulated vends Poin int t of

• f Purc

rchase Regulated shops, malls, restaurants, bars Highly regulated: Distillery in state of sale, excise of Rs15 per PL Exc xcis ise Contr trol Less restricted; Higher excise duties

• f minimum of Rs40 per PL

~30% Alco cohol l Content 42.8% Rs 30 per nip Min n Retail il Price Rs 45 per nip (cheap brands)

Source: IWSR for IMFL data, State excise and Four-S research for IMIL data *Household Premium Index (HPI) :indicator of ‘Living Standard’ by Indian Readership Survey **CAGR (Q4’10 – Q4’12);

IMIL IMFL

Premium segments are out-performing with volumes

• f premium whisky up by 20%, super-premium

whisky up by 21% and scotch whisky up by 23% (5 yr CAGR from 2009-2013).

IMFL DELIVERING A ROBUST PERFORMANCE

IMFL Consumption in India in 2013

Source: MotilalOswal Equity Research – classification for 2012

Super Premium / Foreign Premium Prestige Regular Cheap / Medium

• IMFL volume growth at 7.3

.3% % (5-Year CAG AGR) R)

• Driven by brandy (5-Year CAGR @ 14.6%)
• Followed by whisky (5-Year CAGR @ 6.7%)

WHISKY 56% BRANDY 24% RUM 15% WHITE SPIRITS 4% OTHERS 1%

IMFL: ROBUST GROWTH AIDED BY PREMIUMISATION

IMFL led by double-digi git gro rowt wth h in affluent population

Attractive demographic hics Premiumi misation n Newer offe ferings Modernized distribut ution

• Households with HPI>20 growing above 20%
• Female drinkers on rise
• Indian houses move towards premium products, exit

cheaper brands

• Imported spirits are growing ~25% YoY and expected to

reach 5mn cases by 2015

• Increased accessibility and societal acceptance with

growth of modern retail and hospitality

• Newer offerings such as low alcohol beers, wines, achieve

success in traditionally whisky led market

• Foreign companies expanding their portfolio
• White spirits, currently ~3% of total IMFL expected to grow

fastest

Mn Cases

• Large industry catering

to lower income, which comprises ~40% of population

• Dominated by fruit and

herbal flavours, typical alcohol strength being 30%

• Regional market with

differences in local preferences

• Variance in penetration

levels and local factors presenting at attractive stat ate-specific

• pportuni

unities s in East India

IMIL: HEALTHY INDUSTRY VOLUMES

Haryana 23 mn cases, -4% CAGR Rajast sthan n 22 mn cases, 13% CAGR Madhya Pradesh 21 mn cases, 6% CAGR Maharash shtra - 38 mn cases, 1% CAGR Bihar 22 mn cases, 20% CAGR West est Bengal 23 mn cases, 20% CAGR Oris issa 2 mn cases, 5% CAGR Chhattis isgarh 9 mn cases, 11% CAGR 164 184 198 215 229

FY0 FY09 FY1 FY10 FY1 FY11 FY1 FY12 FY1 FY13

*3- Yr CAGR, based on latest data available

IMIL: BRANDING A GAME CHANGER

Siza zable consumer r base Brandi ding on rise se Evolv volving market structure re Co Conversi rsion fro from underre reported Move fro from m illicit, toddy

~41% of population belongs to SEC-D and SEC-E excluding the BPL population Consumer pull for branded products providing stickiness to sales volumes Health-conscious consumers with increasing income levels shifting from local/ illegal liquor to IMIL Quota systems being gradually reduced Distribution systems being opened up Move towards quality grain-based IMIL ~77% of consumption goes unrecorded (average 2003-05), indicating scope for growth via conversion from unreported (Source: WHO, Adult (15+) per capita consumption)

Paradigm gm shift towards consumerism sm and b branding g fro from m commod

• ditized country

y liquor

TABLE OF CONTENTS

• Indian Alcobev Sector – A High Potential, High Growth Market
• GSL - Leading Spirits Company
• Growth strategy to be pan-India 360⁰ player
• Financial overview
• Shareholding and Board of Directors
• Annexure

12

EVOLVED FROM ‘BULK’ TO UNIQUE ‘360º’ MODEL

• Entry into attractive East India market, beginning with IMIL in Bihar
• Launch of profitable value added by-product (DDGS)
• Started construction in East India for greenfield projects

2014-15 15

Set-up India’s first grain based distillery in Samalkha (Haryana) Set-up 2nd plant in Behror and entered Rajasthan IMIL market Commenced bottling at Samalkha; entered Haryana’s IMIL market Started bottling for ABD India Entered the Delhi IMIL market Launched first IMFL brand Launched Hannibal Legendary in the rum segment Tie-up with Jagatjit for bottling Launched Country Club in the whisky segment Merged with ADL Launched Nimboo under IMIL Tie-up with USL for bottling Operating capacity up by 42.2mn BL Raised investment from Templeton Initiated expansion plans in East India

1994-95 95 1996-99 99 2000 2008 2009 2010-11 11 2012 2013

Revenues in Rs Million

MANUFACTURING - 29% REVENUE CAGR

• Domestic – 34.0 Mn Litres
• International – 12.8 Mn Litres
• Third party bottling – 3.3 Mn Cases

CONSUMER

• IMFL – 129K cases
• IMIL – 8.6 Mn cases

STRONG PERFORMANCE

Robust revenue growth at ~13 13% CAGR (FY11-15), manufacturing and consumer revenue ratio at ~45:55 (average) in last five years

Net Revenue e Break ak-up up

FY11 FY12 FY13 FY14 FY15

Consumer Manufacturing 3,545 4,891 5,017 4,965 5,857 34% 33% 45% 54% 56% 66% 67% 55% 46% 44%

AMONGST THE LARGEST

GRAIN DISTILLERS IN INDIA

• State of the art manufacturing facilities in Rajasthan and

Haryana, annual operating capacity of ~90 Mn Litres

• Based on ‘multi-pressure’ distillation technology combined with

‘zero discharge’ and ‘integrated evaporation’ ensuring superior quality, higher energy efficiency and lower costs

LARGE OPPORTUNITY IN

DISTILLERS DRIED GRAINS WITH SOLUBLES (DDGS)

• Launched Glob
• bus

us ProRice roRice, a high-protein, high energy animal feed ingredient in FY2014-15

• Globus ProRice is a value added by-product of alcohol

manufacturing process, known as rice based DDGS – provides an attractive replacement option for soybean meal and maize

• Large opportunity in India with size of animal feed over 20

Mn metric tons, growing at 6-8% pa.

• Strong traction seen - brand-building and awareness

measures yielding results in short time period

• Globus annual DDGS manufacturing capacity at ~35,000

MT, FY 2015-16 to be first full year of operations

MANUFACTURING:

BACKBONE FOR CONSUMER OPERATIONS

• Manufacturing

has shown strong growth with operating capacity up 3x since FY10 to ~90mn BL

• Alcohol recovery rate is one of the

highest in the country, achieved through continuous focus on improving efficiencies

• 56%% of bulk alcohol production used

captively in higher margin/ value added businesses, i.e., consumer business and third-party bottling

1.2 1.6 2.3 2.7 3.3 FY11 FY12 FY13 FY14 FY15 38 51 62 67 69 95% 89% 64% 50% 56% 0% 50% 100% 50 100 FY11 FY12 FY13 FY14 FY15 Production (Mn Litres) Captive Consumption (%)

Strong traction in manufacturing revenues (Rs Bn) Captive consumption

MANUFACTURING:

BULK & BOTTLING GROW RAPIDLY

• Bulk revenues* grew at high CAGR of

33%, driven by 25% CAGR in volumes

• ver FY11-15
• Quick scale up to high utilization after

addition of large capacities in FY12 & FY13 (40 Mn litres each year)

• Franchise bottling aggregate volumes

grew at 17% CAGR over FY11-15

• Bottling fee income growth higher at

24% CAGR to reach Rs 118 Mn in FY15

Bulk volumes growing at 25% CAGR* Bottling volumes grow at 17% CAGR

* Includes bulk alcohol sales to ABD in Rajasthan

19 23 35 42 47 87% 76% 72% 75% 77% 0% 50% 100% 20 40 60 FY11 FY12 FY13 FY14 FY15 Bulk Sales (Mn Litres) Capacity Utilization % 1.8 1.3 1.9 2.4 3.3 28 29 31 32 36 20 40 0.0 2.0 4.0 FY11 FY12 FY13 FY14 FY15 Bottling Volumes (Total) Mn Cases Bottling Fee (Rs/case)

Rajasthan Haryana Delhi hi

• ~100% coverage at retailer level
• Popular brands – Nimboo, Narangi, Goldee
• 2nd largest IMIL company in Haryana with 10% market share
• 3rd largest IMIL player in Delhi with market share of 15%+
• ~85% distribution coverage at retailer level
• Outperformed industry with 5-Yr CAGR 17%
• Popular brands – Heer Ranjha, Ghoomar
• #1 privat

ate e IMIL L co compa pany y in Rajasthan wit ith market share of

• f 25%

Strong brands with flavours customized to meet regional / local preferences

AMONGST THE FEW IMIL PLAYERS WITH A SUSTAINABLE MULTI-STATE FOOTPRINT

Bihar

• Exclusive access to prestigious Patna District for 5 years, from FY15

IMIL:

GROWTH AMID CHALLENGES

• Revenues resilient driven by high growth

in Rajasthan at over 25% CAGR during FY11-FY15

• Partly offset by weakness in Haryana

due to increasing competition, price- cutting wars, transient industry de- growth in industry in Haryana

• Foray into Bihar IMIL in FY15, one of the

fastest growing markets, to boost IMIL revenues

IMIL Volumes & Realization State-wise Volume Share – FY15

8.8 12.4 10.2 7 .9 8.6 250 248 259 288 295 200 250 300 0.0 5.0 10.0 15.0 FY11 FY12 FY13 FY14 FY15 Volumes (Mn Cases) Realizations (Rs/Case) Rajasthan, 64% Haryana, 26% Delhi, 6% Bihar, 3%

GLOBUS PRESENCE IN IMFL

Whisky product targeted towards young professionals Strong traction in para-military 3rd largest selling gin in its category in Rajasthan

WHISK SKY Y RUM WHITE E SPIRITS

• Established 3 mainstream brands in key IMFL segments, Sales volumes of ~130,000

cases in FY15

TABLE OF CONTENTS

• Indian Alcobev Sector – A High Potential, High Growth Market
• GSL, leading Spirits company
• Growth strategy to be pan-India 360⁰ player
• Financial overview
• Shareholding and Board of Directors
• Annexure

22

PRESENT NT FUTURE NEAR TERM STRATEGY

• Established 360⁰ model in

North India (Haryana & Rajasthan)

• Strong IMIL brands that have

acceptance and loyalty

• Bottling operations for India’s

largest brands of top IMFL players

• Backed by reputed investor,

Templeton

• Large market share in IMIL

by offering quality products to the consumer

• Establish sustainable

premium brands in IMFL

• High capacity utilisation

with focus on technology and efficiency at old and new facilities

• Portfolio of high value by

products

• Enter fast growing liq

iquor uor markets of We West Beng engal & Bihar with comp mple lete 360 60⁰

• ffering
• Lau

Launch ch premium brands of value ue

• Establish DDGS

GS, a v value ue- added ed bypro roduc uct, as a replac laceme ment nt for soya ya in th the Ind ndian anima mal feed ed market

GLOBUS PLANS

Greenfield facilities in West Bengal/ Bihar (Under Construction)

• Strong fit with 360⁰ Model
• Large alcohol deficit, growing IMIL industry@20%+

levels

Severe Alcohol Deficit in East India (mn ltrs)

Exist istin ing g facili ilities s at Haryana & Rajast sthan

EXPANSION INTO EAST

TABLE OF CONTENTS

• Indian Alcobev Sector – A High Potential, High Growth Market
• GSL, leading Spirits company
• Growth strategy to be pan-India 360⁰ player
• Financial overview
• Shareholding and Board of Directors
• Annexure

25

13% CAGR in Revenues Net Profit (Rs Mn) 14% CAGR in Networth Healthy leverage (Debt-Equity Ratio)

ROBUST REVENUES, STRONG BALANCE SHEET

3,545 4,891 5,017 4,965 5,857 18% 15% 14% 9% 8%

• 1%

4% 9% 14% 19% 2000 4000 6000 FY11 FY12 FY13 FY14 FY15 Revenue (Rs Mn) EBITDA Margin 399 409 342 43 71 FY11 FY12 FY13 FY14 FY15 2,085 2,473 3,503 3,508 3,551 FY11 FY12 FY13 FY14 FY15 0.24 0.43 0.21 0.26 0.35 FY11 FY12 FY13 FY14 FY15

TABLE OF CONTENTS

• Indian Alcobev Sector – A High Potential, High Growth Market
• GSL, leading Spirits company
• Growth strategy to be pan-India 360⁰ player
• Financial overview
• Shareholding and Board of Directors
• Annexure

27

SHAREHOLDING PATTERN

28

As on 31st March, 2015 Outstanding shares – 28.8 mn

Major r Non-Promot

• ter Shareholders

rs % shareholdin ing Templeton Strategic Emerging Markets Fund IV, LDC 17 .49% SBI Emerging Business Fund 6.40%

Promoters, 56.4% FII, 0.2% DII, 6.5% Templeton Strategic Emerging Markets, 17.49% Corporate, 2.4% Public & Others, 17.0%

BOARD OF DIRECTORS

29

Mr. . Vive vek Gupta Non-Ex Execut utiv ive Chair irman Over 20 years experience in the industry in senior leadership roles. Mr Gupta is Joint Managing Director of Delton Cables Ltd. Mr. Gupta completed his schooling from Doon School, Dehrandun and holds a B.Com (Honours) degree from Hans Raj College, Delhi University. Mr. . Ajay y Kumar ar Swar arup Pro romot

• ter

r & Managin ing Direct ctor Over 24 years of experience in the liquor industry. Mr. Swarup promoted GSL in 1993 and prior to that co-promoted Associated Distilleries in 1983. Mr. Swarup completed his schooling from Doon School, Dehrandun; graduated in Economics from St. Stephens College, Delhi University, and is a PGDBM from IIM Kolkata. He was President of All India Distillers’ Association during the years 1992 – 95. Mr. . ShekharSwaru rup Execut cutiv ive e Dire rect ctor

• Mr. Swarup joined GSL in 2008. Mr. Swarup has graduated in Business and Management

from University of Bradford, United Kingdom. He has prior experience with Smart Analyst India. Mr. . Manik ik Lal l Dutt tta Execut cutiv ive e Dire rect ctor Over 36 years of experience in alcohol industry. Mr. Dutta was earlier with UB Group as production head for North India & Nepal operation.

• Dr. BhaskarRoy

Execut cutiv ive e Dire rect ctor r and CFO Over 21 years of experience in finance and general management with companies such as Dhampur Sugar Mills Ltd and Saraya Industries Ltd.

BOARD OF DIRECTORS

30

Mr. . Jogin inder Singh gh Damij ija Independent t Direct ctor Over 46 years of experience in various industries including liquor. Served with major spirit companies including UB Group in multiple positions and as Director and Vice chairman of SAB India. Mr. . Santosh Kumar Bishwa wal Independent t Direct ctor Extensive experience with companies such Union Carbide, UB Group in senior positions.

• Mr. Bishwal is a faculty at XLRI.

Mr. . Kunal Agarwa wal Independent t Direct ctor

• Mr. Agarwal is a Founder Director of Brattle Foods Pvt Ltd and Laxman Logistics Pvt Ltd. He

has prior experience with A.T. Kearney and Citigroup. Mr. Agarwal holds an A.B. (Honours) degree in Economics from Harvard College. Mr. . Rajesh h Sehgal Nominee Direct ctor Rajesh Sehgal, senior executive director and head of private equity – South Asia, Middle East and Africa joined the Templeton organization in 1999. He has research responsibilities for companies in India, Africa, and the Middle East. Prior to joining Templeton, Mr. Sehgal worked with SBI Capital Markets Limited as the manager of the Treasury & Investments Group.

• Ms. Ruchi

hika Bansal Non-Ex Execut utiv ive Direct ctor Over 12 years of experience in corporate finance and strategy consulting. She is a Commerce graduate from SRCC and PGDM from MDI Gurgaon.

TABLE OF CONTENTS

• Indian Alcobev Sector – A High Potential, High Growth Market
• GSL, leading Spirits company
• Growth strategy to be pan-India 360⁰ player
• Financial overview
• Shareholding and Board of Directors
• Annexure

31

HISTORICAL FINANCIALS: PROFIT AND LOSS

32

Particul iculars (In Rs Mn) FY11 FY12 FY13 FY14 FY15 Reve evenue e fro from Ope perat ations

3,545 4,891 5,017 4,965 5,857

EBIT ITDA

645 743 703 450 48 487

EBIT ITDA Margin in %

18% 8% 15% 5% 14% 4% 9% 9% 8% 8%

Depreciation

69 123 165 285* 287*

EBIT

576 620 538 165 200

Other Income

7 7 49 29 44

Finance Cost

28 48 65 102 141

Exceptional Items

1

• 60**
• PBT

554 578 522 33 103

Tax

155 169 180

• 10

32

PAT

399 99 40 409 342 42 43 43 71 71

PAT Margin in

11% 1% 8% 8% 7% 7% 1% 1% 1% 1%

* Includes accelerated depreciation on intangible assets ** Deprecation added back due to change in accounting rules

HISTORICAL FINANCIALS: HEALTHY BALANCE SHEET

33

Particul iculars (In Rs Mn) FY11 FY12 FY13 FY14 FY15 Shareholders Funds 2,085 2,473 3,503 3,508 3,551 Debt 510 1,064 730 895 1,238 Deferred Tax & Other Liabilities 267 344 396 505 480 Current Liabilities 749 1,114 1,307 1,059 1,177 Total Liabil ilities 3,611 4,995 5,936 5,967 6,446 46 Net Block 2,195 2,795 4,152 4,148 4,605 CWIP 129 602 208 290 312 Investments & Other non-current assets 4 67 218 377 446 Current Assets 1,283 1,532 1,358 1,153 1,083 Total Asset ets 3,611 4,995 5,936 5,967 6,446 46

DR.

• R. BHASKAR

AR ROY Globus Spir irits Limited Phone: +91 11 6642 4600 Fax: +91 11 6642 4629 Email: broy@globusgroup.in

For r more information about us, please visit t www.g .globusspiri irits.c .com m or co contact ct:

34

RUPAM AM PR PRASAD AD/ / SEEMA A SHUKL UKLA Four

• ur – S Servi

vices Phone: +91 124 4251442/ +91 124 4251441 Email: rupam.prasad@four-s.com / seema@four-s.com

Established in 1992, Globus Sprits Limited (BSE code: 533104, NSE Id: GLOBUSSPR, ISIN Id:INE615I01010) is engaged in manufacturing, marketing and sale of Indian Made Indian Liquor(IMIL), Indian Made Foreign Liquor (IMFL), Bulk Alcohol and contract bottling for established IMFL brands. The Company has a well established presence in the IMIL segment and is making its mark in the IMFL segment apart from taking up contract bottling to cater to renowned Indian players. GSL currently operates three modern and fully integrated distilleries at Behror, Rajasthan and Samalkha and Hisar, Haryana. It is one of the largest and most efficient grain based distilleries in India with highest alcohol recovery per unit of grain.

ABOUT US