Dabur India Limited Investor Presentation August 2018 1
Contents 1. Recent Macroeconomic Trends 2. Dabur’s Performance 3. The Way Forward 2
Macroeconomic Trends 9.2% 8.1% 7.7% 7.6% 7.0% 6.8% 6.3% 6.1% 5.6% GDP growth is inching up Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 CY16 CY16 CY16 CY16 CY17 CY17 CY17 CY17 CY18 5.2% 5.1% 5.0% 4.9% 4.6% 4.4% 4.3% 4.2% Inflation under control Dec'17 Jan'18 Feb'18 Mar'18 Apr'18 May'18 Jun'18 Jul'18 72.00 USD/INR – Last 1 Year Rupee showing 66.00 signs of weakness 60.00 18-Jul-17 20-Sep-17 23-Nov-17 26-Jan-18 31-Mar-18 3-Jun-18 6-Aug-18 3 Source: Ministry of Statistics and Programme Implementation
Rural remains a mixed bag Increase in MSP and expected fiscal stimulus to drive Monsoon 1 deficiency at 9% with East lagging farmer incomes ` Excess Normal Deficient Large Deficient Source: IMD, News articles 4 1. From 1 st June 2018 to 15 th August 2018
Contents 1. Recent Macroeconomic Trends 2. Dabur’s Performance 3. The Way Forward 5
Dabur 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% 9.8% 9.7% 7.7% 7.2% 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 Dabur Value Growth Dabur Volume Growth Consol Revenue grew by 6.9% in FY18… …and FY19 has started on a strong footing 6.9% Consol Revenue by 19.6% 3.6% 2.8% Operating Profit by 25% 0.6% Profit after Tax by 25% Reported Value GST Impact Currency Impact Underlying GST Growth and Currency Adjusted Growth 6
…with broad - based growth… FY18 Q1 FY19 Health Supplements 9.4% 27.5% Digestives 10.2% 21.6% OTC & Ethicals 3.8% 16.9% Hair Care 4.1% 20.6% Oral Care 14.4% 17.3% Home Care 13.0% 17.4% Skin Care 11.0% 27.1% Foods 0.7% 26.1% 7 Note: Numbers in the charts represent GST adjusted growth (like-to-like)
…along with increase in market shares across most categories Volume MS (MAT Jul'18) Relative Compet- #3 #1 #1 #2 #1 #1 #1 #4 itive Position 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Toothpastes Digestive MRC Hair Oils Chyawanprash Air Juices & Shampoos Tablets Fresheners Nectars Change vs MAT 10 30 231 30 207 70 30 (30) Jul’17 (bps) 8
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 1,022,974 916,869 912,332 910,095 Mar-15 Mar-16 Mar-17 Mar-18 Project Buniyaad achieved its direct reach target of 1 mn outlets and continues to expand distribution 9
Project Buniyaad has led to larger distribution, higher efficiencies and improved hygiene Increase in Lines Sold in Rural Increase in Average Brand Sold (ABS) in Rural 8.30 20.0 19.3 8.00 7.90 18.6 7.60 17.9 17.3 7.30 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19 Reduced Pipeline Days of Stock 33 31 24 17 FY16 FY17 FY18 Q1 FY19 10
Drivers of growth – Channel Changes 2 24.5% 23.5% 23.6% 23.0% 22.2% 21.7% 12.8% 12.5% 11.6% 10.1% 8.7% 7.7% 1.2% 0.8% 0.6% Wholesale Superstockist MT E-comm Enterprise FY17 FY18 Q1 FY19 Superstockist, MT and E-comm gaining saliency; Wholesale and Enterprise continues to shrink Note: Enterprise includes Institution, Para Military, CSD and Food Services 11
Product Launches – Since April 2017 Vatika Enriched Real Ethnic Range Real Koolerz 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 12
International Business – Recent Performance Region-wise Sales (FY18) Performance of Key Markets (FY18) Constant Currency Growth Rate – FY18 Americas 31.8% 14.0% Middle East Europe 17.3% 16.9% 34.0% 13.7% 10.8% 10.7% 10.6% 10.0% Asia 22.4% Africa (15.8%) Egypt GCC Saudi Nigeria Nepal Turkey Namaste SSA 18.8% Arabia International Business – An Update FY18 was impacted by geopolitical headwinds and currency devaluation • Good recovery seen in GCC since Q4 FY18 • Namaste Business seeing a turnaround with improvement in profitability • Hobi Business facing another round of currency devaluation • SSA Business on a sound footing post the localisation of manufacturing • 13
MENA and SSA GDP Growth Expected to Improve Middle East & North Africa Sub-Saharan Africa MENA Region - GDP Growth % SSA Region - GDP Growth % 3.7% 3.6% 3.4% 3.2% 2.8% 2.2% 2017 2018 2019 2017 2018 2019 14 Source: IMF WEO April 2018
International Business – Recent Marketing Initiatives (1/3) Dabur Amla Hair Oil 22 mn views - New 360 degree campaign with Dabur Amla Hair Oil - Vol. Mother-Daughter Thematic MS% (Saudi Arabia) - Disproportionate Media spends on 52% PAN-Arab Media - Increase in Vol. MS% 47% Mar-Apr 2018 May-Jun 2018 Vatika Gel - Influencer Campaign Vatika Gel - Vol. MS% (Saudi Arabia) - Ferrari Challenge: Hair Style remains 19% intact @ 120 km/hr 17% Mar-Apr 2018 May-Jun 2018 15
International Business – Recent Marketing Initiatives (2/3) Hobby - Launch of Cream Wax Premium Packaging – Body Wash NPD – Cream Wax - Packaging upgrade in Body Wash Vatika - In-Store and Outdoor visibility Merchandisers Gondola Billboards improvement in Southern Africa 16
International Business – Recent Marketing Initiatives (1/3) Dabur Herbal Toothpaste - Thematic Micro-branding in Nigeria Bus Branding Van Branding Dealer Boards (Lagos and Abuja) ORS (Namaste) - New POS Execution in UK Retail Outlets 17
International Business – Strategic Levers - Capitalize on global Back to Nature trend Innovation - LUPs to drive penetration - Distributor restructuring GTM - Real-time analytics - JBP (Joint Business Planning) with Key Accounts - Saving initiatives Cost Management - Manufacturing efficiencies 18
Contents 1. Recent Macroeconomic Trends 2. Dabur’s Performance 3. The Way Forward 19
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 20
1 Driving Innovation and Renovation for Market Leadership (a) Focus on Core Brands Core Brands Q1 FY19 Growth 54.7% 45.6% 41.6% 31.2% 30.2% 26.8% 25.0% 12.7% Dabur Amla Real Dabur Red Dabur Honey Dabur Dabur Lal Tail Honitus Pudin Hara Toothpaste Chyawanprash Additionally, there is focus on seeking accelerated growth from scalable brands like Dabur Lal Tail, Pudin Hara, Honitus, Stresscom, etc 21
1 Driving Innovation and Renovation for Market Leadership (b) Creating Competitive Leverage Superior Claims Superior Formulation Superior Packaging Superiority over mineral oils Addition of Soya Protein for Damage Free Hair 2x stronger hair vs Other Amla HO 22
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 23
1 Driving Innovation and Renovation for Market Leadership (d) Driving NPDs Q1 FY19 The Way Ahead Strengthening our Ayurvedic/ Natural Offerings Products for Gen Y and Z Premiumization 24
2 Regionalization RISE Regional Insights And Speed of Execution RI : Regional Insights SE : Speed of Execution (Long Term Strategic) (Quick Wins, Low Investment) • Capture Consumer, Packaging and Media Insights Trade interventions • • Use Analytics for Specific meaningful actions Activations and visibility drives • • Dive into new adjacent categories Distribution initiatives • • Regions to provide new growth opportunities Consumer promotions • 25
3 Channel Focus Strategy Increasing Direct Rural Focus E-commerce/ MT Focus Distribution 3 rd largest • Q1 FY19 saw 150% growth in Range Expansion distribution #3 e-commerce network in FMCG in India covering 1. Increase lines sold in – Strong growth across 6.3 mn+ outlets rural platforms • Backed by media activation, 2. Conversion of bigger Aim to increase direct reach to 1.2 mn outlets visibility and consumer substockist to direct by end of FY19 promotions Drive Sell Out FY17 0.91 1. Activations involving RSP 2. Involvement of FY18 1.02 Substockist 3. Activation and sell out at FY19E 1.20 Wholesale 26
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