Dabur India Limited Investor Presentation CLSA India Forum – November 2018 1
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The way forward 6. Annexure 2
Dabur is the largest science-based Ayurveda company Overview Awards Established in 1884 – 134 years of trust and Dabur Red Paste rated as 2nd most excellence trusted brand by the consumers in the Oral Care category by the Brand Equity India’s Most Trust Brands 2017 One of the world’s largest in Ayurveda and natural healthcare Having one of the largest distribution network in Dabur moves up 4 Places in Fortune India, covering ~6.4 mn outlets India 500 List ; ranked 163 in the list for 2015 20 world class manufacturing facilities catering to needs of diverse markets Dabur ranked 25 in the list of Best Strong overseas presence with ~28% contribution Companies for CSR in India , according to consolidated sales to the Economic Times Market Dabur India successfully held the first- cap: ever Guinness World Record attempt US$ for the largest simultaneous Nasya 9bn Panchkarma Treatment session 3
Manufacturing facilities located across the globe 12 manufacturing locations in India 8 international manufacturing locations UAE Baddi Jammu Sahibabad Egypt ` Alwar Tezpur Pantnagar Newai Nigeria Katni South Africa Turkey Narendrapur Silvasa Sri Lanka Nasik Pithampur Bangladesh Nepal 4
One of the largest distribution network in India Urban Rural Factory Factory C&F C&F GT Stockist MT Stockist Insti Stockist Super Stockist Wholesaler Sub Stockist Retailer Retailer Retailer Consumer Consumer Consumer Consumer Distribution reach of 6.4 mn retail outlets with direct reach of 1.1 mn+ 5
Strong financial profile Revenue has become ~3x over • CAGR : 11.9% the last 10 years 78.3 78.7 77.0 77.5 70.9 61.7 Last 3 years’ revenue looks Revenue • 53.1 from 41.0 optically static due to change 34.0 28.1 Operations in accounting standards, demonetization and FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 implementation of GST Operating Profit Operating Margins (%) 19.3% 19.6% 20.9% 18.9% 19.5% 16.9% 16.8% 16.0% 16.6% 16.7% Steady increase in operating • 16.2 15.2 15.1 Operating 13.1 11.8 margin, touching 20.9% in 9.9 Profit 8.9 8.0 6.4 FY18 4.7 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Profit After Tax (PAT) PAT Margins (%) 15.9% 16.6% 17.5% PAT has grown at a CAGR of • 13.8% 14.7% 13.9% 12.1% 12.4% 13.2% 13.5% 15% over the last 10 years 13.5 12.8 12.5 PAT 10.5 9.3 PAT margin went up to 17.5% 7.6 • 6.4 5.7 5.0 3.9 in FY18 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Note: All figures are in INR bn 6 FY09 to FY15 is basis IGAAP, FY16 and FY17 are as per IndAS and FY18 is as per IndAS and takes into account GST
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The way forward 6. Annexure 7
Business Structure Domestic International (72%) (28%) Domestic Others Organic Acquired FMCG (4%) (67%) (33%) (68%) 8
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The way forward 6. Annexure 9
The domestic business has seen recovery in the past fiscal year with growth picking up since Q2 FY18… Value and Volume Trend for Domestic FMCG 23.7% 21.0% 17.7% 13.0% 9.7% 9.8% 8.6% 8.1% 7.2% 7.7% 4.1% 4.5% 2.4% 2.4% 0.7% 0.5% (4.4%) (5.2%) (5.0%) (6.6%) Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q2 FY19 Dabur Value Growth Dabur Volume Growth India Business grew by 8.0% in FY18… …and has started FY19 on a strong footing Standalone – H1 FY19 figures 8.0% 4.0% Revenue by 15.7%* 3.9% Operating Profit by 19.6% Reported Value Growth GST Impact Underlying GST Profit after Tax by 18.7% Adjusted Growth * GST Adjusted Growth 10 The value growth from Q2 FY18 to Q1 FY19 refers to GST adjusted growth
…with broad - based growth… Revenue Key FY18 H1 FY19 Category Contribution Brands Growth Growth (FY18) Health 17% 9.4% 18.6% Supplements Healthcare Digestives 6% 10.2% 16.1% (32%) OTC & 9% 3.8% 11.7% Ethicals Hair Care 21% 4.1% 18.0% Oral Care 17% 14.4% 10.0% HPC (50%) Home Care 7% 13.0% 13.7% Skin Care 5% 11.0% 19.2% Foods Foods 18% 0.7% 14.3% (18%) 11 Note: Numbers in the charts represent GST adjusted growth (like-to-like)
…and market leadership in most categories Leading position in key categories across verticals #Relative Competitive Position 1 #1 #1 #2 #2 #2 #3 #1 #2 #1 #1 #1 Honey Chyawanprash Baby Glucose Hair Oils Oral Care Skin Toilet Cleaners Air Mosquito Juices Massage Care - Fresheners Repellant Oil Bleaches Creams Healthcare Home and Personal Care Foods 12 1. Position basis Nielsen Market Share data MAT Sep’18
Drivers of growth – Project Buniyaad 1 Enabling Technology Urban Strategy Using technology to track and improve performance Leveraging potential through Channel based approach and automate processes Rural Strategy New Avenues of Growth Split the front line teams into two to increase reach Leveraging the alternate channels of MT and E-comm and frequency – Showing significant positive gains to grow at a rapid pace Continue Engagement Portfolio Focus Using initiatives and technology to build and Leveraging split teams for focused portfolio building continuously motivate the trade and front line teams Direct Reach – No. of Outlets 1,085,309 1,022,974 916,869 912,332 910,095 Mar-15 Mar-16 Mar-17 Mar-18 Sep-18 Project Buniyaad achieved its direct reach target of 1 mn outlets and also led to doubling of rural sales people to ~1,400 13
Drivers of growth – Channel Changes 2 24.5% 23.8% 23.5% 23.0% 22.1% 21.7% 13.5% 12.5% 11.6% 10.1% 8.7% 7.5% 1.3% 0.8% 0.6% Wholesale Superstockist MT E-comm Enterprise FY17 FY18 H1 FY19 Superstockist, MT and E-comm gaining saliency; Wholesale and Enterprise continues to shrink Note: Enterprise includes Institution, Para Military, CSD and Food Services 14
Recent Product Launches Honey Squeezy – Vatika Enriched Real Ethnic Range 225 gm Real Mocktails Hajmola Chat Cola Coconut Hair Oil Vatika Shampoo Anmol Jasmine HO Odonil Zipper Honitus Hotsip Fem De-Tan Bleach with Satt Poshan Dabur Red Gel Oxy Pro Clear Facial Odonil – Odomos Fabric Glycodab Tablets Kit Fruit Blast Roll On 15
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The way forward 6. Annexure 16
International Business – Financial Profile Sales (INR bn) CAGR: 14% • International Business comprises the Organic and Acquired business 27.1 • Organic business (67% of international) is an extension of Indian 24.2 23.1 23.2 21.8 portfolio with the same personal care brands operating internationally 18.3 16.2 • Acquired business (32% of international) comprises Hobi and 8.9 Namaste • FY17 and FY18 were impacted due to geopolitical headwinds and severe currency devaluation in our key markets FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Region-wise Sales (FY18) Performance of Key Markets (H1 FY19) Constant Currency Growth Rate – H1 FY19 Americas 14.0% 34.0% Middle East 28.9% 27.3% Europe 34.0% 10.8% 22.0% 10.0% 7.5% 4.0% Asia 1.5% 22.4% Africa 18.8% Egypt GCC Saudi Pakistan Nepal Turkey Namaste SSA Arabia 17
Organic International Business FY06 FY18 Others Others 5% Oral Care 10% Skin Care 2% 7% Hair Oil 34% Oral Care 12% Hamamzaith & Styling Hair Cream 9% 11% Hair Oil Shampoo 93% 17% Key Brands c Organic International Business has evolved from being just a Hair Oil business to a diversified personal care entity 18
International Business – Strategic Levers - Capitalize on global Back to Nature trend Innovation - Drive penetration through value offerings - Distributor restructuring GTM - Real-time analytics - JBP (Joint Business Planning) with Key Accounts - Saving initiatives Cost Management - Manufacturing efficiencies 19
Agenda 1. Dabur – Overview 2. Business Structure 3. India Business 4. International Business 5. The way forward 6. Annexure 20
Key Elements Driving Innovation Capability 5 1 and Renovation for Improvement Market Leadership Cost Optimisation 4 2 and Improving Regionalization Service Levels 3 Channel Focus Strategy 21
1 Driving Innovation and Renovation for Market Leadership (a) Focus on Core and Scalable Brands Enhanced Investments in Core Brands Accelerated Growth from Scalable Brands 22
1 Driving Innovation and Renovation for Market Leadership (b) Creating Competitive Leverage Superior Claims Superior Formulation Superior Packaging Superiority over mineral oils Superiority over other Almond HO 2x stronger hair vs Other Amla HO 23
1 Driving Innovation and Renovation for Market Leadership (c) Media Strategy for Driving Brand Preference Consolidated Buys with Impact Fragmented Brand Buys Value Ads Key Shift in Approach Impact Lead Core CPRP Focus Prime Time Focus Network Core Prime High Brand Deals Time Focus on Saliency Integrations Reduction in Focus Sponsorships Long Tail / on and Optimising Top Impact Channel Mix Programs 24
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